Two Big Banks Just Warned Circle’s USDC Profit Machine Is Under Threat
Mizuho and JPMorgan both cut estimates on Circle, warning new revenue-sharing deals could shrink the money it earns from your USDC.
Two major Wall Street banks have turned notably more cautious on Circle, the company behind the USDC stablecoin, warning that new deals being struck across the industry could eat into the profits Circle makes from every dollar you hold in USDC. Mizuho and JPMorgan both cut their outlooks on Circle this week, pointing to separate but related threats: a rival stablecoin called OpenUSD, and a fresh revenue-sharing arrangement with the trading platform Hyperliquid.
If you hold USDC, none of this changes what your coins are worth today — USDC is still designed to stay pegged to $1. But these warnings are about who gets to profit from the billions of dollars sitting in USDC reserves, and that fight is starting to reshape Circle’s business.
Why banks make money off your stablecoin
Here’s the part most people don’t realize: when you hold USDC, Circle doesn’t just sit on your dollars for free. It invests the reserves backing USDC — largely in short-term U.S. Treasury bonds — and keeps most of the interest, or “yield,” that those investments earn. That yield is the core of Circle’s business model and a big chunk of its revenue.
Analysts are now warning that Circle may have to give away a bigger slice of that yield to partners, which would squeeze its profits even if USDC itself keeps growing.
Mizuho points to a new rival: OpenUSD
Mizuho downgraded Circle’s stock from Neutral to Underperform and slashed its price target from $85 to $50 per share, according to a research note published Tuesday by analysts led by Dan Dolev. The bank’s concern centers on OpenUSD, a competing stablecoin launched on June 30 by a consortium called Open Standard, which already counts more than 140 partners, including Mastercard and Stripe.
The threat, according to Mizuho, is OpenUSD’s revenue-sharing model, which the analysts said “could fundamentally alter” Circle’s business, since Circle “relies on retaining a large portion of the treasury yield to drive revenues.” In plain terms: if OpenUSD’s backers can offer partners a bigger cut of the yield than Circle does, those partners may have less reason to keep pushing USDC.
Mizuho also cut its 2027 adjusted earnings (EBITDA) forecast for Circle sharply, from $1.09 billion down to $699 million. The bank flagged Circle’s upcoming renegotiation with Coinbase, expected in August, as another looming risk — a deal that determines how much of USDC’s yield Circle has to share with its longtime distribution partner.
JPMorgan flags the Hyperliquid deal too
Separately, JPMorgan trimmed its earnings forecasts for both Circle and Coinbase after Circle signed a new revenue-sharing agreement with Hyperliquid, a crypto trading platform. That deal changes how income generated from USDC’s reserves gets split, and JPMorgan said it could affect the broader economics of the stablecoin business for both companies over time.
Taken together, the two notes tell a similar story from two different angles: Circle is facing growing pressure to share more of its USDC yield with partners and rivals, whether that’s a new competitor like OpenUSD or an existing partner striking a better deal for itself.
What it means for everyday USDC holders
For most everyday holders, USDC itself isn’t going anywhere overnight — it remains one of the most widely used stablecoins, and these analyst notes are about Circle’s stock and profit outlook, not the safety of your dollar-pegged coins. But it’s a reminder that stablecoins aren’t a purely neutral piece of financial plumbing; there’s real money being fought over behind the scenes, and how that fight shakes out could eventually shape which stablecoins get the best partnerships, the widest support on exchanges, and the strongest backing going forward.
Read more: Wall Street Turns Cold on Circle — What It Means for Your USDC Stash
