Wall Street analysts downgrade Circle as traditional banks launch competing stablecoin infrastructure

Jul 13, 2026

Circle stock has fallen over 20% in 2026, prompting Mizuho to downgrade the company to Underperform and slash its price target to $50. Analysts warn that the June 30 launch of Open USD—a rival stablecoin backed by over 140 firms including Visa and Coinbase—threatens Circle's USDC reserve-revenue model. Compounding these pressures, US banking groups are lobbying the Senate to tighten the CLARITY Act to prevent deposit flight, while technical indicators show sustained institutional outflows.

Circle stock price decline

▪Circle stock fell more than 2% in pre-market trading on July 14, 2026, and has declined over 20% since the beginning of 2026.
▪Mizuho downgraded Circle to Underperform from Neutral and slashed its price target from $85 to $50 on July 14, 2026.
▪Robert W. Baird lowered its Circle price target from $138 to $100 on July 13, 2026, citing expectations that second-quarter 2026 revenue will miss Wall Street estimates.

Banking lobby CLARITY Act opposition

▪US banking organizations sent a joint letter to Senate leaders urging them to tighten stablecoin provisions in Section 404 of the CLARITY Act.
▪US banking groups argue that the current wording of the CLARITY Act could allow stablecoin issuers to offer interest-like incentives that trigger deposit flight from traditional banks.

CLARITY Act Senate passage uncertainty

▪The estimated probability of the CLARITY Act passing the Senate has fallen to 37% after a key White House adviser supporting the bill took a one-month leave.
▪President Donald Trump called on Congress to pass the CLARITY Act following the death of Senator Lindsey Graham on July 12, 2026.

Circle technical chart analysis

▪The Chaikin Money Flow indicator for Circle stock sat near -0.39 in mid-July 2026, indicating sustained institutional capital outflows.
▪Circle stock formed a head-and-shoulders pattern between April and June 2026, breaking below its support line in late June 2026.

Circle OCC trust bank charter

▪ARK Invest purchased approximately $13.8 million worth of Circle shares on July 9, 2026.
▪Circle secured final approval from the Office of the Comptroller of the Currency for a national trust bank charter in July 2026.

OUSD stablecoin competitive threat

▪Mizuho raised its estimate for Circle's 2027 distribution and transaction costs to 73% from 64% and cut its 2027 adjusted EBITDA forecast to $699 million.
▪The Open USD stablecoin launched on June 30, 2026, backed by a consortium of over 140 companies including Visa, Mastercard, Stripe, BlackRock, and Coinbase.
▪Open USD operates on a pass-through model that routes nearly all reserve yield to distributors, threatening Circle's model of retaining roughly 38% of reserve income.