Circle Internet Group (CRCL) stock slipped in overnight trading ahead of Tuesday’s session, as Mizuho took a more cautious view of the stablecoin company’s future growth prospects, downgrading the stock as analysts weigh potential pressure on its revenue model amid shifting industry dynamics.

Analyst Concerns Over CRCL’s Revenue Structure

Mizuho downgraded Circle’s rating to ‘Underperform’ from ‘Neutral’ and reduced its price target to $50 from $85, implying a 21% downside to the stock’s last close.

The firm believes the emergence of Open-USD, a distribution-focused model involving more than 140 partners, could reshape how Circle generates income.

The analyst noted that Circle’s current approach depends heavily on keeping a significant share of treasury-related returns to support revenue. However, more distribution partners and tougher competition could make it harder for the company to keep earning the same level of profits over time.  edged 0.6% lower overnight, ahead of Tuesday.

Interest Rate Outlook Adds Limited Support

Mizuho now expects interest rates in 2027 to stay higher than it had previously predicted. Even so, the firm believes higher rates alone will not be enough to offset the impact of lower pricing and increased competition on Circle's earnings.

Circle has become a major participant in the digital asset sector through its USDC stablecoin, which generates revenue partly through reserves backing the token.

Bitcoin and crypto-related stocks continue to face heat, even though investors are hopeful that the CLARITY Act, a bill aimed at creating clearer rules for cryptocurrencies, could soon be debated in the U.S. Senate.

Bitcoin has crashed 28% year-to-date as higher interest rates and uncertainty over when central banks will ease monetary policy have reduced demand for speculative investments.

On Monday, President Donald Trump  the U.S. Senate to pass the CLARITY Act, saying the bill would honor the late Sen. Lindsey Graham (R-SC), who strongly supported it. Trump also warned that China is trying to become the global leader in cryptocurrency and artificial intelligence, and said the U.S. should not fall behind.

What CRCL Retail Traders Are Saying 

On Stocktwits, retail sentiment around the stock remained in ‘bullish’ territory with 491% jump in message volume over the last 24 hours.

A user , “Crypto flushing, but stablecoins reign supreme? Just filled more spot positions and calls on $CRCL! Amidst recent macro turbulence, regulated stablecoins stand out as the ultimate conviction play.”

Another user said, “$CRCL is trading near historic lows even as the business keeps accelerating.Stock’s down ~75% from ATH with the rest of crypto, but Circle stands out as a stablecoin issuer. USDC is the #2 most-used stablecoin, and that utility gives $CRCL a very different setup than the usual crypto names.”

CRCL stock has cratered 20% so far this year.