JPMorgan has expressed concerns about Circle, a stablecoin issuer, predicting a potential 56% drop in stock price due to increasing competition.
JPMorgan's Forecast for Circle
JPMorgan analyst Kenneth Worthington has set a price target of $80 for Circle, indicating a 56% decline from its current price of $182. While Circle's shares have risen 487% since the IPO, they have fallen approximately 39% from the all-time high of $299 reached on June 23.
Increased Competition in the Stablecoin Market
Worthington pointed to rising competition as the main threat to Circle's growth. He noted that with the launch of tokenized deposit accounts and new players entering the digital dollar space, Circle's market share could quickly diminish. He stated, "We are witnessing the launch of tokenized deposit accounts and new entrants, and the risk in this industry implies low switching costs."
Barclays' Optimism and Circle's Future
In contrast to JPMorgan's outlook, Barclays maintains a more bullish perspective on Circle's future. Barclays analyst Ramsey El-Assal has set a price target of $215, believing that dollar-pegged stablecoins will continue to gain traction among traditional finance firms.
The outlook for Circle's shares highlights the uncertainty in the stablecoin market, where competitive pressures may significantly influence the company's future performance.
