TheBlock
Bernstein cut its price target on Circle to $140 from $190 but kept its Outperform rating, framing the recent Open USD consortium threat as a passing headwind rather than a structural break in USDC's dominance.
Why it matters
The dollar haircut is the loud part of the note, but the call is actually constructive: an Outperform with a lower target says the analyst expects a drawdown, not a deterioration in the business model. Bernstein is treating Open USD as a sentiment shock that dragged the multiple, not as a credible challenger to USDC's distribution and reserve scale.
Market impact
The firm models USDC supply ending Q2 at roughly $73 billion, down from $77 billion in Q1, a roughly 5% sequential contraction. If Q2 prints near that level, the thesis is that reserve income recovers as competition fades and Circle's float normalises through the back half of the year.
Frequently asked questions
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Why did Bernstein cut its Circle price target to $140?
The cut reflects a lower multiple after the Open USD consortium announcement weighed on the stock. Bernstein still rates Circle Outperform, framing the move as a sentiment shock rather than a threat to USDC's reserve base.
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What is the Open USD consortium and why did it hit Circle?
Open USD is a competing stablecoin consortium that emerged in the quarter and briefly pressured expectations for USDC's market share. Bernstein now says that threat will fade rather than translate into meaningful float migration.
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What is Bernstein's Q2 USDC supply estimate?
Bernstein expects USDC supply to end Q2 at about $73 billion, down from $77 billion in Q1, a roughly 5% sequential contraction.
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Why does the Outperform rating matter more than the lower target?
An Outperform at a lower target signals that Bernstein sees a drawdown rather than fundamental deterioration. The thesis is that reserve income recovers once the Open USD narrative cools.
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Does this change USDC's competitive position versus Tether?
Bernstein's note does not address USDT directly, but framing Open USD as fading suggests USDC's near-term competitive risk is dilution by new entrants rather than share loss to Tether.
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