Mizuho Forecasts CRCL Stock to Underperform As Circle Faces Competition From OpenUSD

Days after taking a neutral stance on Circle (CRCL), Mizuho has downgraded the stablecoin issuer’s stock to “underperform.” Mizuho’s analysts are looking beyond Circle’s recent OCC approval, betting that emerging stablecoins like OpenUSD will affect the company’s profitability.

Mizuho downgrades Circle stock over OpenUSD threat

In a note to investors, Mizuho analysts changed their position on CRCL from “neutral” to “underperform,” forecasting the stock to continue its downward slide. The analysts also slashed their end-of-year price target to $50 from their benchmark of $85, a 20% decline from present trading levels.

Following the release of the note, CRCL slumped 4% to finish trading at $63 on Monday. A bird’s-eye view of CRCL shows the stablecoin issuer’s stock has since cratered by 78% from its all-time high of $299 after its widely anticipated IPO event in 2025.

According to Mizuho, Circle faces revenue risk from the emergence of OpenUSD, a consortium-governed stablecoin with the backing of over 140 finance and technology firms. OpenUSD’s value proposition will allow participating institutions to share reserve income, a sharp contrast from Circle’s USDC model.

Hours after OpenUSD’s announcement, CRCL stock tanked by almost 10% in a single day, reflecting waning investors’ optimism in Circle’s long-term prospects. Circle CEO Jeremy Allaire downplayed fears of OpenUSD eating at USDC’s market share, citing its deep liquidity and institutional adoption.

In Q1 2026, Circle reported higher quarterly revenues and reserve incomes, with analysts noting that “it’s tough to be bearish on Circle.” Meanwhile, USDC has flipped Tether’s USDT in adjusted stablecoin transaction volumes in the first half of 2026, underscoring strong network growth.

OCC approvals fail to impress Mizuho

At the tail end of last week, Circle clinched final approval from the Office of the Comptroller of the Currency (OCC) for a national trust bank. The approval sent the CRCL stock soaring by over 7%, but Mizuho analysts remained unimpressed by the market reaction.

“While a positive development, we believe the market reaction is likely overly optimistic, as this does not resolve fundamental issues that have been hurting the stock recently,” wrote the analysts.

Mizuho disclosed that it will remain “on the sidelines” regarding CRCL, citing a declining circulating supply of $7 billion as a major area of concern. Mizuho noted that the drawdown is the largest monthly decline since 2022 as redemptions continue to outpace new issuance for USDC.

However, Circle's CEO considered the OCC approval as a “historic day” for the stablecoin issue. He noted that approval will allow it to offer custodial services for digital assets, forming part of its grand plans to “build a new architecture for money on the internet.”