JPMorgan Warns Hyperliquid Deal Could Squeeze Circle and Coinbase
JPMorgan said the new revenue split could reduce long-term profitability as Hyperliquid holds about $6 billion in USDC, or 8% of supply.
- JPMorgan lowered earnings forecasts for Circle and Coinbase after a new USDC revenue-sharing agreement with Hyperliquid changed how reserve income is divided, citing the revised economics' noticeable effect on future profitability.
- Circle and Coinbase announced the Hyperliquid partnership on May 14 to deepen USDC integration; since June 11, USDC became Hyperliquid's preferred stablecoin, strengthening the platform's role in Circle's distribution network.
- Coinbase will now pay 90% of USDC reserve yields generated on Hyperliquid to the platform instead of splitting proceeds with Circle, while Hyperliquid holds about $6 billion in USDC—roughly 8% of circulating supply.
- Competition for market share could force Circle and Coinbase to surrender increasingly larger portions of reserve income to maintain platform partnerships, even as USDC adoption continues rising.
- Despite the downgrade, JPMorgan projects continued USDC earnings growth through 2027 if Federal Reserve rates rise 25 basis points in October, offsetting revenue concessions; Bernstein and William Blair maintain positive Circle outlooks, though Mizuho has turned cautious.
17 Articles
17 Articles
JPMorgan Says Circle, Coinbase Face Stablecoin Profit Pressure
JPMorgan Chase & Co. said Circle Internet Group Inc. and Coinbase Global Inc. face mounting pressure on their stablecoin business, arguing a new partnership with crypto exchange Hyperliquid highlights a “prisoner’s dilemma” for both companies.
JPMorgan warns Hyperliquid deal could squeeze Circle and Coinbase
JPMorgan has lowered its earnings forecasts for Circle and Coinbase after a new USDC revenue-sharing agreement with Hyperliquid changed how income from the stablecoin’s reserves will be divided. According to a JPMorgan research note, the revised agreement could reduce the…
Hyperliquid Picks USDC as Its Core Stablecoin in Coinbase Deal to Unify On-Chain Liquidity
Key Takeaways: As no more AQAv2 treasury deployers are on the horizon, Hyperliquid will become the primary stablecoin for the United States Dollar (USDC). Both Coinbase and Circle will be locked up in HYPE, while Coinbase will also have the opportunity to purchase the USDH brand assets. The USDH will gradually be phased out and grants will be available to the developer to help with USDC migration. User Score8.7 Follow us on Google News Hyperliq…
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