Circle Falls 7% as Mizuho Cuts Target, Warns on AI

Mizuho trimmed its price target on Circle Internet Group, the issuer of the USDC stablecoin, to $43 from $45 and kept an Underperform rating, according to Blockonomi. Circle shares closed down 7% at $79.84 on Monday, and the revised target sits roughly 46% below that price.

The analysts’ central worry is the rise of AI personal assistants. In their report, they argued that AI personal assistant engines pose a marked risk to Circle’s medium-term revenue.

Key facts

• Mizuho cut Circle’s price target to $43 from $45 and kept an Underperform rating, per Blockonomi.
• The bank estimated AI agents could reduce USDC’s market value by $4 billion to $9 billion and put 10% to 20% of reserve revenue at medium-term risk.
• Mizuho lowered its 2027 average USDC circulation forecast to $101 billion from $108 billion, and its adjusted EBITDA estimate to $603 million from $635 million.
• Circle posted about $1.4 billion in revenue for the first half of 2026, and USDC settled more than $36 trillion in onchain transactions in that period.
• Coincentral reported that Cathie Wood’s ARK bought 65,615 Circle shares on October 26, a trade the Blockonomi report did not mention.

What the AI simulation found

Mizuho tested AI agents, including one named Muse, to see how they advise users holding cash. According to Blockonomi, the agents leaned toward recommending FDIC-insured savings accounts, such as those offered by SoFi, over USDC. Even when users asked to stay in crypto, the agents seemed to favor holding on other platforms rather than with Circle directly, the report said.

Coincentral noted a limit to that evidence: the simulations capture suggestions rather than actual transfers of funds out of USDC.

Where USDC is held shapes the revenue picture. Circle’s own platform held about 17% of USDC in the second quarter, where holders earn no yield, while Coinbase held 30% and other services 53%. Coincentral reported that interest on the assets backing USDC generated 95.2% of Circle’s revenue in that quarter.

In a faster AI adoption case, Mizuho projected about $7 billion moving into fiat products and another $2 billion into higher-yielding stablecoins, trimming USDC’s market cap by as much as $9 billion and cutting reserve revenue by 18%. That case lowered projected reserve revenue to $4.1 billion from $4.3 billion, a reduction of about 5%. Coincentral also reported that Canada is reviewing draft rules that would bar stablecoin interest payments.

Why it matters

Circle’s earnings rest heavily on reserve income rather than transaction fees, so a shift in where USDC sits feeds straight into revenue. If AI assistants become the default way retail users pick where to park cash, the stablecoin could lose ground to insured bank accounts without any single actor deciding to leave crypto. The report follows a first half in which USDC’s share of global stablecoin transaction volume climbed to about 77% by June from 60% a year earlier, per Circle data cited by Blockonomi, so the warning lands at a point of visible strength.

What to watch

Circle plans to publish third-quarter results on November 4, according to Coincentral, giving updated figures on USDC circulation, reserve income and quarterly performance. The SoFi earnings outlook referenced by Coincentral, with a report on October 27, will also test how AI-driven shifts in cash advice play out for the bank alternative Mizuho’s agents favored.

None of this is financial advice, and stock and crypto markets are volatile and uncertain; the price target and forecasts described here are analyst estimates, not guaranteed outcomes.

Disclaimer: This article is for information only and is not investment, financial or trading advice. Cryptocurrency prices are highly volatile. Always do your own research.

Sources: Blockonomi, Coincentral