TL;DR
Mizuho cut Circle’s price target to $43 from $45, maintaining Underperform and warning AI agents could pressure USDC balances and reserve revenue.
The brokerage sees $4 billion to $9 billion of potential USDC market-cap downside and a 10% to 20% medium-term reserve-revenue risk.
A DeFiLlama October 26 reading placed USDC near $71.7 billion in market cap, while Mizuho lowered its 2027 average circulation forecast to $101 billion amid wider adoption.
Mizuho cut its price target for Circle Internet Group to $43 from $45 while maintaining an Underperform rating, warning that AI personal assistants could pressure the company’s medium-term reserve revenue. A DeFiLlama reading for October 26 placed USDC market capitalization at about $71.7 billion. The bearish thesis centers on whether AI agents will recommend holding USDC when higher-yielding alternatives are available , adding a new risk dimension to the stablecoin market .
AI Agents Could Pressure Circle’s Reserve Revenue
Mizuho estimates wider AI-agent adoption could reduce USDC’s market capitalization by $4 billion to $9 billion and create a 10% to 20% downside risk to Circle’s reserve revenue. Its simulations found that agents could steer users toward higher-yielding insured fiat products or, for crypto-focused users, toward other platforms. The concern is not that AI prevents USDC payments, but that automated financial recommendations could reduce balances generating reserve income. That pressure would compound existing questions around how Circle and distribution partners divide USDC economics .
The analysis also highlights where USDC balances sit. As of the second quarter, Mizuho said about 17% of USDC was held on Circle’s platform, where holders earned no yield, while 30% was held on Coinbase and 53% elsewhere. AI agents could therefore influence where users store value even if USDC remains useful for transactions. The scenario contrasts with Circle’s own push to make USDC useful for autonomous software through AI-agent payment and research tools .
Under Mizuho’s faster-adoption scenario, roughly $7 billion could shift into fiat products and another $2 billion into higher-yielding stablecoins. That outcome would cut USDC market capitalization by as much as $9 billion and reduce reserve revenue by 18%. The brokerage also lowered its 2027 average USDC circulation forecast to $101 billion from $108 billion. Projected reserve revenue fell 5% to $4.1 billion from $4.3 billion, while adjusted EBITDA was cut to $603 million from $635 million.
Circle’s shares closed 7% lower at $79.84 on Monday, leaving Mizuho’s $43 target about 46% below that level. The warning arrives while Circle continues pursuing USDC expansion across new international markets , meaning the analyst’s forecast remains a downside scenario rather than an established outcome. Mizuho is effectively betting that smarter automated allocation could weaken the economics of idle USDC balances , but actual revenue effects will depend on adoption patterns, user preferences and where stablecoin balances ultimately reside.
