JPMorgan: “Circle's target price is $80... Concerns over intensifying market competition”

JPMorgan has set a target stock price of $80 for Circle Internet Financial Ltd., the issuer of the US dollar-based stablecoin USDC.

According to Cointelegraph on the 30th (local time), JPMorgan stated in a report, “By the end of next year, the target price for Circle is $80. We recommend underweighting,” adding, “Although the company holds a favorable position in the stablecoin market, its current market capitalization is overvalued.”

JPMorgan focused on the potential decline in value due to intensifying market competition. The report noted, “Competition among stablecoin issuers represents a potential risk factor for Circle,” and added, “Not only these issuers, but also tokenized deposit accounts, digital money market funds, and other virtual asset (cryptocurrency) investment products are also considered competitors.” Furthermore, “If competitors reach a certain level of market share, they may be able to more rapidly expand their influence by leveraging the existing network built by Circle,” the report added.

The report also anticipated that central bank digital currencies (CBDCs) could have a negative impact. It stated, “The United States is favorable toward stablecoins to strengthen the competitiveness of the dollar, but other countries are not. This will serve as a significant constraint for Circle’s global market expansion.” Additionally, “If a CBDC is adopted in Europe, a negative impact on Circle’s long-term growth and profitability is expected,” the report concluded.