Circle stock faces three major risks as analysts lower target price to $84.

[Chain News] On August 14, it was reported that stock researchers at Mizuho Securities stated that Circle's stock faces mid-term risks such as USDC growth slower than expected, rising distribution costs, and the possibility of the Fed lowering interest rates. Analysts predict a benchmark stock price of CRCL at $84, with a pessimistic forecast suggesting that by 2027 the stock price will ultimately be $40, below the closing price of $153.16 on Wednesday, the day after the company released its quarterly earnings report. Notably, Bernstein analysts maintain a target price of $230 for the stock.

Analysts believe that the stock's unexpectedly poor performance may be due to three reasons:

First, the gap between the "dream" and "reality" of USDC in terms of issuance is widening. Although the stablecoin has grown 6% year-to-date this quarter as interest in cryptocurrencies continues to rise, this is still below the company's long-term compounded annual growth rate expectation of 40%.

In addition to the continuous increase in issuance costs, "rising from 39% of the reserve pool in 2022 to 61% in 2024... and even reaching 64% in the second quarter," analysts point out that Circle's profit margins seem to be further compressed. With the introduction of the GENIUS Act (, intensified competition may accelerate this process. Currently, several large institutions have expressed their intention to launch or introduce stablecoins, while Circle's biggest competitor is planning to return to the US market.

Finally, analysts stated, "The cooling of CPI is good news for the economy, but bad news for CRCL." The U.S. Department of Labor reported on Tuesday that the Consumer Price Index in the U.S. rose by 2.7% year-on-year in July, slightly below expectations, which has raised concerns about the Fed possibly lowering interest rates.