Mizuho cuts Circle price target citing AI assistants as risk to USDC revenue
The bank projects USDC reserve revenue could fall 10% to 20% as AI agents steer users toward higher-yielding fiat options.
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Mizuho said on October 26, 2026, that AI personal assistants pose a risk to Circle’s medium-term revenue. The bank maintained its underperform rating on the stablecoin issuer and lowered its price target.
The bank ran a simulation asking AI agents, including one called Muse, where to hold cash. The agents often recommended moving USDC into higher-yielding, FDIC-insured fiat options, such as SoFi savings accounts. Users who wanted to stay in crypto were directed to other platforms instead of holding USDC in Circle’s ecosystem.
Mizuho estimates wider adoption of AI agents could reduce USDC’s market capitalization by $4 billion to $9 billion and cut Circle’s medium-term reserve revenue by 10% to 20%. In a faster-adoption scenario, about $7 billion shifts into fiat products and $2 billion into higher-yielding stablecoins, with reserve revenue declining by 18%. The bank now forecasts 2027 average USDC circulation at $101 billion, down from $108 billion, and reserve revenue at $4.1 billion, down from $4.3 billion. These figures are projections, not observed outflows.
Circle generates nearly all its revenue from interest on USDC reserves. USDC does not pay yield to holders on Circle’s platform. In the second quarter of 2026, about 17% of USDC was held on Circle’s platform, 30% on Coinbase, and 53% elsewhere, according to Mizuho figures reported by The Block.