Mizuho says Circle bank approval doesn't solve USDC growth, stablecoin competition risks
Mizuho analysts have maintained a neutral rating on Circle, arguing that recent regulatory approval does not solve fundamental growth challenges for the USDC stablecoin. The report cites declining market capitalization and increased competition from consortium-backed stablecoins as primary risks.
Why it matters
This analysis reflects the broader market skepticism regarding the long-term viability and competitive edge of established stablecoin issuers in a maturing crypto market.
"While a positive development, we believe the market reaction is likely overly optimistic, as this does not resolve fundamental issues that have been hurting the stock of recent," analysts led by Dan Dolev said in the Friday report.
Shares of the stablecoin issuer closed 5% higher on Friday following the news. The stock on Monday has given back most of those gains, trading 4.7% lower at $63.03 at publication time.
Mizuho reiterated its neutral rating, arguing that the regulatory approval does not resolve the fundamental issues weighing on the stock.
Those challenges include a decline in USDC's market capitalization since March 2026, which the bank said raises questions about the stablecoin's growth trajectory.
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