Bernstein slashed its price target on Circle Internet Group (NYSE: CRCL) to $140 from $190 on Wednesday, though it retained its Outperform rating. Analyst Gautam Chhugani stated that while the immediate threat from the Open USD consortium is overstated, near-term headwinds including a significant revenue-sharing agreement with Hyperliquid have necessitated a downward revision in financial forecasts. The new target implies roughly 118% upside from current trading levels.

The downgrade follows a broadly flat second quarter for Circle, with USDC supply ending Q2 at roughly $73 billion, down from $77 billion in Q1. Consequently, Bernstein cut its end-of-2026 USDC supply estimate by 37% to $83 billion and its 2028 figure by 40% to roughly $170 billion. These supply reductions drove a 12% cut in the 2026 adjusted EBITDA forecast to $602 million. However, the firm kept its 10-year USDC supply growth rate at 32%, projecting total stablecoin supply to reach $4 trillion by 2035 with Circle holding a 30% share.

Competitive Landscape: Open USD Threat

The June launch of Open USD, a consortium stablecoin backed by more than 140 payments, banking, and fintech names including Visa (NYSE: V), Mastercard (NYSE: MA), and Stripe, weighed heavily on CRCL sentiment. Bernstein argued this threat is overstated, noting that Circle has been signing memorandums of understanding with many of the same entities named in the alliance.

Evidence of internal cohesion issues within the consortium was highlighted by a Samsung official who stated there were no formal consultations on Open USD and the company did not know what role it would play. Additionally, Visa management indicated on its latest earnings call that it would remain multi-coin and multi-chain rather than backing a single stablecoin.

Revenue Drag: Hyperliquid Deal

A clearer near-term drag on revenue stems from an agreement between Circle and Coinbase (NASDAQ: COIN) signed in May. The deal redirects roughly 90% of reserve income earned on USDC held on Hyperliquid back to the exchange. USDC balances on Hyperliquid climbed from $5 billion to more than $6 billion, resulting in roughly $190 million in annual reserve income flowing to the exchange. Bernstein noted that the full margin impact of this arrangement will hit in Q3.

Market Reaction and Technical Levels

Despite positive developments, including national trust bank approval on July 15 and the acquisition of IBM’s entire blockchain patent portfolio, CRCL shares have remained under pressure. The stock dropped to $62.75 on Wednesday, pressing into the $60 to $62 demand zone. This level represents the last meaningful support before the stock loses its post-IPO base entirely.

All four major exponential moving averages (EMAs) sit overhead as resistance:

The $60 to $62 demand zone must hold into upcoming earnings to prevent a further breakdown.

Raymond James analyst Madison Suhr has initiated coverage on Circle Internet Group with a Market Perform rating. The assessment provides a benchmark for the company's performance relative to market expectations.

Circle Internet Group is listed on the NYSE under the ticker CRCL. The Market Perform rating indicates that the stock is expected to perform in line with the broader market.