Bernstein Keeps Circle Outperform at $140-Why a 54% Target Cut Still Leaves 118% Upside

Bernstein cut the target, but kept the bull case

Bernstein pushed the Circle debate forward. It cut its price target to $140 from $190 while keeping an Outperform rating ahead of Circle's second-quarter earnings. For investors, the key question is not whether near-term expectations were trimmed, but whether the market overreacted to fears around Open USD.

The downgrade was a timing reset, not a model breakdown

The revision mainly pulled forward weaker crypto-market assumptions. Bernstein cut its end-2026 USDC supply estimate by 37%, reduced its 2028 supply outlook by 40%, and lowered its 2026 adjusted EBITDA forecast by 12%. It kept intact its longer-term framework, including a 32% 10-year USDC growth assumption and an expectation that Circle could capture roughly 30% of the stablecoin market. In other words, Bernstein revised the path down, not the long-range opportunity.

Why the selloff may have priced too much competitive damage

The sharpest part of the scare was Open USD, launched with backing from more than 140 payment, banking, and fintech firms. Bernstein argues that threat is overstated. Its note points out that Circle has been signing MOUs with the same entities named in the alliance, while Visa has said it will remain multi-coin and multi-chain. Even after the cut, Bernstein's $140 target still implies about 118% upside from the low-$60s. That is not a neutral call; it suggests the market may be treating Open USD as a bigger immediate threat than Bernstein does.

Circle's flow slowed, but the business did not break

The bigger operating question is not whether Open USD exists. It is whether Circle's cash engine has weakened for good.

What the estimate cuts were actually based on

Bernstein cut estimates after seeing slower supply growth. Circle ended the quarter with $73.3 billion of USDC in circulation, down from $77 billion at the start of Q2. That helped drive Bernstein's decision to reduce its 2026 USDC supply forecast to $83 billion and its 2026 adjusted EBITDA forecast to $602 million. The logic is straightforward: softer supply growth pressure near-term revenue and reserve-income momentum before long-term assumptions reprice.

Why the latest quarter still looks resilient

Slower is not the same as broken. Circle's latest reported quarter also showed average USDC in circulation of $76.5 billion, up 25% year over year. Total revenue and reserve income reached $701.3 million, up 7%, while adjusted EBITDA rose 8% to $143 million. That points to gentler growth rather than a collapsing usage or revenue model.

Why Visa's stance matters more than the consortium headline

Open USD looked powerful because of the name list behind it, but that narrative weakens if major players are not committing exclusive flow to the project. Visa said it will remain multi-coin and multi-chain, which makes the "institutional flush" argument less clear-cut. Combined with Circle's own existing relationships, that supports Bernstein's view that the competitive scare looks more cosmetic than structural Circle has signed MOUs with the same entities.

What could change the stock narrative from here

What Bernstein expects into earnings

Bernstein expects Circle's second-quarter results to be essentially flat. That makes the report less about a simple headline beat and more about whether underlying demand and usage still look healthy beneath that baseline.

The practical test for investors

The bull case improves if volume, usage, and product traction keep building even with softer supply growth. The risk case gets louder if results stay flat and the market continues to treat Circle mainly as a one-metric story. For now, the key watchpoint is whether Circle can show that slower USDC circulation is a temporary deceleration rather than the start of a durable trend.