Mizuho: AI agents create a risk of up to 20% revenue loss for Circle

Mizuho lowered the target price for Circle Internet Group from $45 to $43 and maintained an Underperform rating, warning that AI assistants pose a "significant risk" to the company's medium-term revenue. Circle's shares closed down 7% at $79.84 on Monday; Mizuho's target price implies a decline of approximately 46% from this level.

"We believe AI assistants pose a significant risk to Circle's medium-term revenue," analysts wrote in a report on Monday.

What will change for USDC

Mizuho estimates that the broader adoption of AI agents could reduce USDC's capitalization by $4–9 billion and decrease Circle's income from reserves. The bank points to a risk of a 10–20% decline in revenue from reserves in the medium term, as agents direct USDC holders to more profitable fiat alternatives or other platforms.

Mizuho's simulation showed that AI agents, including Muse, are likely to recommend moving away from USDC in favor of more profitable FDIC-insured fiat alternatives, such as SoFi savings accounts. Even when users insist on cryptocurrency, agents, according to the report, "prefer other platforms" instead of storing USDC directly in the Circle ecosystem.

As of Q2, about 17% of USDC was stored on the Circle platform, where holders did not earn yields, 30% on Coinbase, and the remaining 53% on other platforms. In a faster AI adoption scenario, Mizuho forecasts a shift of about $7 billion to fiat products and another $2 billion to more profitable stablecoins: USDC's capitalization will shrink to $9 billion, and Circle's revenue from reserves will decrease by 18%.

Lowered forecasts

Analysts also lowered the forecast for the average volume of USDC in circulation for 2027 to $101 billion from $108 billion with broader AI adoption. This reduces the revenue forecast from reserves by 5% to $4.1 billion from $4.3 billion. The adjusted EBITDA forecast is reduced by about 5% to $603 million from $635 million.

Earlier this month, Circle reported revenue of about $1.4 billion for the first half of 2026 and that it maintains about 7 cents of net profit for every dollar of revenue. In the first half of the year, USDC conducted over $36 trillion in on-chain volume. By June, USDC accounted for about 77% of the global stablecoin transaction volume compared to 60% a year earlier, according to Circle's blog on October 16. In Q2 2026, revenue from reserves accounted for 95.2% of the company's total revenue.

This is not Mizuho's first attack on Circle: the bank noted competitive threats to the issuer as early as July 2026.

For USDC holders, Mizuho's estimate of a $4–9 billion reduction in capitalization is a demand forecast, not a warning about the token's backing: it's about how many people will choose to hold USDC, not whether each coin will remain redeemable. Circle's Q3 report is expected on November 4.