Analysts: Circle sell-off overdone after Open USD launch

Circle’s stock (CRCL) dropped about 18% on Tuesday after the announcement of Open USD (OUSD), a stablecoin project backed by Coinbase, Visa, Mastercard, Stripe, BlackRock and more than 140 other companies. The backers said the initiative aims to build shared digital payments infrastructure and plans to launch later this year. Clear Street analysts described the market reaction as overdone and said there is no clear evidence yet that OUSD will gain material traction before launch.

Shares recovered roughly 3% in subsequent trading but remained well below their 52-week high of $262.97. Circle shares have fallen over recent months and are down more than 18% over the past six months. Clear Street set a 12-month price target of $157 for Circle, a level the firm said would imply about 140% upside from recent trading prices.

Clear Street compared OUSD to past rival efforts, including USDG of the Global Dollar Network, which the firm said has not gained meaningful market share. The analysts wrote that while OUSD has prominent partners, building comparable liquidity, payment rails and regulatory relationships takes time and that existing evidence does not yet show OUSD will displace established liquidity pools or integrations in exchanges, wallets and payment platforms.

Jeremy Allaire, Circle’s CEO, posted on X that large stablecoin networks require a broad set of services and applications, strong liquidity and “a deep integration with the policy and regulatory environment.” He wrote that Circle and its global ecosystem of partners have invested in those elements and stated the company “does not intend to slow down.”

USDC is the second-largest stablecoin by market value, with a market capitalization above $70 billion. Tether’s USDT remains the largest stablecoin, with a market cap in the low hundreds of billions of dollars. Market participants have noted that institutional support for OUSD gives the project visibility; Clear Street emphasized that visibility alone is not proof of future market share.

The appearance of OUSD underscores competition in the stablecoin market, where new projects seek different governance and infrastructure arrangements. Circle has said it will continue investing in product, liquidity and compliance to support USDC and its partner network.