According to reports from Bloomberg, JPMorgan analyst Kenneth Worthington is predicting a double-digit percentage drop in the stock of Circle (CRCL), a stablecoin issuer listed on the New York Stock Exchange. This comes after the stock surged nearly 6 times in less than a month. Worthington has set a price target of $80 for Circle, which is approximately 56% lower than its current price.
Worthington highlighted competition as the biggest threat facing Circle, especially as more companies are gearing up to launch their own stablecoins. He stated, “We are witnessing the launch of tokenized deposit accounts, digital money market funds, and a host of new entrants looking to enter into the digital dollar market. The risk is that a few will succeed in taking enough share to reach critical mass in a business with low switching costs, allowing them to leverage the network built by Circle.”
Major retailers like Amazon and Walmart are reportedly among the companies planning to issue stablecoins in the near future.
As of the time of writing, CRCL is trading at $182, up by 487% from its IPO price of $31 but down by 39% from its peak of $299 on June 23rd. The market capitalization of the stablecoin issuer currently stands at over $40 billion with a price-to-earnings ratio of 234.
In contrast to JPMorgan’s bearish outlook, Barclays analyst Ramsey El-Assal is bullish on Circle, setting a price target of $215. El-Assal believes that stablecoins pegged to the US dollar will continue to grow as traditional finance embraces them.
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