Bernstein Lowers Circle Price Target Amid Open USD Consortium Launch
Wall Street brokerage Bernstein has reduced its price target on Circle Internet Group (NYSE: CRCL) from $190 to $140 per share while maintaining a Buy-equivalent outperform rating. The move comes as the stablecoin issuer faces mounting competitive pressure from the newly launched Open USD consortium, backed by financial heavyweights including Visa (NYSE: V), Mastercard (NYSE: MA), and Stripe.
Analyst Sees Overblown Fears Creating Buying Opportunity
In a note to clients, crypto analyst Gautam Chhugani argues that the market’s reaction to the Open USD consortium is excessive. Despite Circle’s stock declining 15% in the month following the consortium’s announcement, Chhugani points out that Circle has been actively signing memorandums of understanding (MOUs) with many of the same entities now participating in the alliance.
“The fears are overblown,” Chhugani writes, noting that Visa executives recently emphasized their intention to remain “multi-coin and multi-chain” rather than exclusively backing a single stablecoin consortium. Visa further clarified that their role is to help clients connect to the broader stablecoin ecosystem rather than pick winners.
Significant Upside Remains at Current Levels
Even with the lowered price target, Bernstein’s $140 valuation implies substantial upside. Circle Internet Group’s stock closed at $64.32 on July 28, meaning the new target represents a 118% premium to current trading levels. The stock has declined approximately 65% over the past 12 months, reflecting broader crypto market volatility and competitive concerns.
Stablecoin Market Dynamics and Competitive Landscape
The stablecoin sector is experiencing intensified competition as traditional financial institutions enter the space. The Open USD consortium represents a coordinated effort by over 140 payment, banking, and fintech companies to establish a regulated, interoperable stablecoin framework. However, Circle’s first-mover advantage with USDC—currently the second-largest stablecoin by market capitalization—provides significant network effects and regulatory compliance infrastructure.
- Circle’s USDC: ~$34B market cap, widely adopted across DeFi and TradFi
- Open USD Consortium: Backed by Visa, Mastercard, Stripe, and 140+ partners
- Regulatory Tailwinds: Increasing clarity on stablecoin legislation globally
- Institutional Adoption: Growing demand for regulated digital dollar alternatives
Key Investment Thesis Points
Bernstein’s continued optimism rests on several pillars: Circle’s established relationships with consortium members, the company’s regulatory head start with money transmitter licenses across U.S. states, and the expanding total addressable market for stablecoins as institutional adoption accelerates. The analyst suggests that rather than a zero-sum game, the stablecoin market is likely to support multiple winners across different use cases and geographies.
FAQ
1. Why did Bernstein lower its price target on Circle (CRCL) stock?
Bernstein reduced its price target from $190 to $140 due to competitive pressures from the newly launched Open USD consortium, which includes major financial players like Visa, Mastercard, and Stripe. However, the firm maintained its Buy-equivalent outperform rating, indicating they believe the sell-off is excessive.
2. What is the Open USD consortium and how does it threaten Circle?
The Open USD consortium is a stablecoin alliance backed by over 140 payment, banking, and fintech companies aiming to create a regulated, interoperable stablecoin framework. It poses competitive pressure to Circle’s USDC stablecoin, but Bernstein analyst Gautam Chhugani argues Circle has existing partnerships with many consortium members.
3. Is Circle (CRCL) stock a good buy at current levels?
Bernstein’s $140 price target implies 118% upside from the $64.32 closing price on July 28. The analyst cites Circle’s regulatory head start, established network effects, and Visa’s stated “multi-coin” strategy as reasons the competitive threat is overblown. However, the stock has fallen 65% over the past year, reflecting significant volatility.
