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Morgan Stanley just slashed Circle’s price target from $106 to $38 and cut the rating to Underweight. The bank cited slower-than-expected USDC growth, heavy reliance on reserve income, and rising competition from tokenized money market funds. Shares dropped hard on the news, adding pressure across crypto equities. This matters because Circle sits at the center of regulated stablecoin infrastructure. When a major Wall Street firm questions the durability of USDC balances and take rates, it tests confidence in the entire stablecoin stack that underpins trading, DeFi, and institutional flows. Tokenized cash products are no longer theoretical competitors, they are already reshaping the reserve landscape. In my view this is a healthy stress test rather than a death sentence. The market is forcing issuers to prove real transaction demand beyond crypto trading. $BTC remains the liquidity anchor while $ETH continues to attract selective treasury buying. $SOL, $XRP and $BNB feel the broader risk sentiment. $ADA, $AVAX, $LINK, $DOT, $UNI, $INJ, $ALGO, $ENA, $DOGE and $HYPE all trade with an eye on stablecoin velocity and institutional comfort levels. Circle reports earnings later this week. The next few sessions will show whether this downgrade is a temporary overhang or a deeper recalibration.