[Morgan Stanley Lowers Circle's Target Price from $106 to $38] BlockBeats News, August 3: Morgan Stanley has downgraded Circle (CRCL) stock from 'Hold' to 'Underweight' and significantly reduced its target price from $106 to $38. Morgan Stanley analyst James Faucette stated that the downgrade is primarily due to the contraction in USDC circulation, which exposes the sensitivity of the company's reserve income and indicates that Circle's business is transitioning to a lower-margin transaction revenue model. The report noted that Morgan Stanley has reduced its USDC volume forecasts for Circle by approximately 33% and 44% for 2027 and 2028, respectively, and expects the company's GAAP earnings per share to be about 3% and 20% lower than market consensus. The analyst pointed out that tokenized money market funds and bank deposit products could exert pressure on USDC balances and revenue-sharing ratios, while Circle's USYC product economic model is relatively weaker. Additionally, the proxy payment business remains limited in scale, with daily transaction volume dropping to approximately $41,900, implying an average transaction amount of about $0.24. Morgan Stanley also mentioned that the Open USD model, which adopts shared governance and reserve income mechanisms, could increase Circle's costs for maintaining USDC distribution channels. [Original Link]