Major Wall Street firms are growing wary of Circle, the issuer behind the USDC stablecoin, as concerns mount over the sustainability of its business model. Mizuho downgraded the company's stock, while JPMorgan cut its earnings estimates, both pointing to intensifying pressure on USDC economics. The stablecoin's revenue depends heavily on interest earned from reserves backing the token, leaving Circle exposed to shifting rate conditions and rising competition in the stablecoin market. Analysts suggest these headwinds could weigh on profitability going forward. The cautious tone marks a shift in sentiment toward Circle, which has positioned itself as a leading regulated stablecoin provider. The downgrades reflect broader questions about how stablecoin issuers can maintain margins amid competitive and macroeconomic challenges, and how sustainable current earnings levels are as the sector continues to evolve.
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