Analysts at Mizuho argue that trading platforms, bank processors, and consumer lenders are poised to benefit from the easier monetary environment – but stablecoin issuers such as Circle could see their revenues squeezed.

Exchanges Poised for Activity Surge

The Fed lowered its benchmark rate to a 4%-4.25% range and signaled two additional cuts by year-end. Historically, lower borrowing costs have reduced the appeal of traditional investments and sparked higher trading activity. For equity and crypto exchanges alike, that can mean more commissions.

Mizuho’s note singled out Robinhood (HOOD), Coinbase (COIN), and eToro (ETOR) as potential winners. The firm estimates that trading commissions make up as much as 70% of their revenue, and periods of monetary easing have typically aligned with higher transaction volumes.

Financial companies tied to transaction accounts also stand to gain. “Balances in transaction accounts tend to expand more quickly when rates fall,” said Mizuho’s Dan Dolev, suggesting that bank processors and consumer lenders will see momentum from a larger pool of account dollars.

Stablecoin Issuers Could Struggle

The picture looks very different for Circle, the company behind USD Coin (USDC). With revenue derived almost entirely from the yield on safe assets like Treasurys, falling interest rates directly reduce the company’s income stream. Mizuho reiterated its underperform rating on Circle (CRCL) shares, maintaining a target of $84.

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Mizuho has been skeptical on Circle since its IPO in June, while remaining more constructive on exchanges. The firm holds a neutral view on Coinbase, with a price target lifted from $267 to $300, and outperform ratings on both Robinhood and eToro.

Crypto assets responded positively to the Fed’s move, with most major tokens gaining around 2%. Lower yields on traditional instruments may further push investors into digital assets and decentralized finance platforms offering 5%-10% annual returns, according to RedStone cofounder Marcin Kazmierczak. That could fuel total value locked (TVL) growth across lending protocols and keep demand for stablecoins high, even as issuers like Circle navigate tighter margins.

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