Morgan Stanley downgraded Circle (CRCL) to underweight from equal-weight on August 3 and cut its price target to $38 from $106, arguing that shrinking USDC circulation highlights the company’s heavy sensitivity to reserve income and that its business mix is moving toward lower-margin transaction revenue. The bank also reduced its 2027 and 2028 forecasts for USDC supply by about 33% and 44%, respectively, and said Circle’s GAAP earnings per share could come in about 3% and 20% below market consensus. At the same time, Morgan Stanley’s latest 13F filing showed it increased its Circle position to 8.32 million shares as of June 30 from about 1.46 million shares, indicating a sizable addition in the second quarter. The contrast has drawn market attention because the filing reflects holdings as of June 30 and does not show whether the firm changed its position before or after the August downgrade.