JPMorgan Initiates Circle (CRCL) Coverage with Underweight Rating, $80 Price Target by 2026

JPMorgan Sets Conservative Outlook for Circle Stock Amid Rising Competitive and Regulatory Pressures

Circle (CRCL) has received its first formal coverage from JPMorgan, with the U.S. investment bank assigning an underweight rating and a price target of $80 by December 2026—a notable 55% discount from its current trading price of $180.

The outlook, presented in JPMorgan’s “North America Equity Research” report on Monday and led by analyst Kenneth Worthington, balances Circle’s strong positioning in the stablecoin space with mounting industry headwinds.

“Our $80 price target reflects a 45x multiple of projected 2027 EPS, plus a $10 premium for upside optionality,” JPMorgan stated.

Valuation Concerns: JPMorgan Targets $21B Market Cap by Late 2026

Despite Circle’s early lead in the stablecoin ecosystem and successful public debut on the New York Stock Exchange (NYSE) on June 5, JPMorgan warns that its current $43.8 billion valuation may be overextended.

By late 2026, JPMorgan forecasts Circle’s market cap will contract to around $21 billion, aligned with its $80 price target. This is still well above the IPO midpoint valuation of $8 billion, but far below current levels.

“We acknowledge Circle’s strong fundamentals, but believe its current share price bakes in more upside than fundamentals justify,” the analysts noted.

Competitive Threats Loom for Stablecoin Issuer

JPMorgan identifies market competition as a key risk factor for Circle’s long-term growth, pointing to the low switching costs for stablecoin users and a growing ecosystem of digital financial products.

An excerpt from JPMorgan’s North America Equity Research seen by Cointelegraph. Source: JPMorgan

The report emphasizes that Circle faces challenges not only from rival stablecoin issuers, but also from:

Tokenized bank deposits

Blockchain-based money market funds

Emerging fintech and DeFi solutions

“If competitors achieve critical mass, they could erode Circle’s market share by leveraging its early network effects,” JPMorgan wrote.

Circle is the 497th largest company worldwide by market capitalization. Source: CompaniesMarketCap

Regulatory Uncertainty and CBDCs Add Pressure

JPMorgan’s analysis also flags regulatory changes and the global rise of central bank digital currencies (CBDCs) as significant risks to Circle’s expansion.

Key regulatory concerns include:

Potential U.S. legislation requiring stablecoin issuers to maintain equity reserves proportional to their circulating supply.

Comparisons to Europe’s MiCA framework, which imposes similar capital requirements.

While Circle is believed to have sufficient equity for current operations, stricter reserve mandates could constrain USDC growth, the analysts said.

Circle (CRCL) shares tumbled 15.5% Friday after peaking above $290 in mid-June. Source: TradingView

On CBDCs:

The report highlights that while the U.S. remains supportive of dollar-backed stablecoins, international CBDC initiatives—particularly in Europe—could dampen Circle’s global ambitions.

“Further CBDC adoption abroad could hinder Circle’s scalability, putting long-term profitability at risk,” the report concluded.

Conclusion: Balanced Fundamentals, But Growing Caution

While Circle continues to benefit from its first-mover advantage in the stablecoin sector, JPMorgan’s cautious stance reflects broader concerns about valuation, regulatory tightening, and intensifying competition. With the market evolving rapidly, investors will need to watch closely how Circle adapts to preserve its leadership.

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