JPMorgan Chase has issued a cautious outlook on Circle Internet Financial (CRCL), assigning an "underweight" rating and projecting a 55% downside to its current share price. The investment bank's December 2026 price target of $80 contrasts sharply with Circle's recent $180 trading level following its NYSE debut.

Valuation Concerns Emerge

The analysis suggests Circle's $43.8 billion market capitalization appears inflated relative to fundamentals. JPMorgan's valuation model applies a 45x multiple to projected 2027 earnings, supplemented by a $10 premium for growth potential. This would place the stablecoin issuer's worth at approximately $21 billion by late 2026 —— significantly below current levels but still 2.6x its $8 billion IPO valuation.

【Key Data】Circle shares peaked above $290 in mid-June before retreating 15.5% last Friday, reflecting mounting investor skepticism about crypto-related valuations.

Competitive Pressures Mount

While acknowledging Circle's first-mover advantage in stablecoins, analysts led by Kenneth Worthington identified multiple threats:

- Emerging rivals in dollar-pegged tokens
- Tokenized deposit products from traditional banks
- Digital money market funds
- Potential regulatory capital requirements mirroring Europe's MiCA framework

"The stablecoin sector's low switching costs create vulnerability," the report noted, suggesting competitors could leverage Circle's infrastructure while siphoning market share.

Regulatory and CBDC Risks

JPMorgan highlighted two additional challenges that could constrain Circle's USDC stablecoin:

1. Possible U.S. adoption of capital reserve rules similar to those in the EU, potentially limiting expansion
2. Global central bank digital currency (CBDC) developments, particularly in Europe, that might impede international growth

Interestingly, the analysis comes as Circle demonstrates remarkable resilience, with USDC maintaining its dollar peg despite recent crypto market turbulence. Industry observers note the stablecoin's $32 billion circulation now represents nearly 30% of the total stablecoin market.

【Market Context】The report emerges during a pivotal week for crypto assets, with Bitcoin ETF flows showing renewed strength and several jurisdictions advancing stablecoin legislation. Circle's ability to navigate these crosscurrents may determine whether JPMorgan's cautious outlook proves prescient.