JPMorgan warns Circle and Coinbase face risks from Hyperliquid's rapid growth
JPMorgan has lowered its forecasts for Circle and Coinbase, arguing that their revised agreement with crypto trading platform Hyperliquid creates long-term risks for the economics of the USDC stablecoin. According to the bank, the new arrangement forces both companies to compete with one another to expand the token's distribution.
According to a report cited by CoinDesk, Hyperliquid has become one of the largest distribution channels for USDC. Analysts estimate that the platform currently holds about $6 billion worth of the stablecoin, representing roughly 8% of its total supply.
JPMorgan said the agreement creates a classic "prisoner's dilemma," in which Circle and Coinbase are incentivized to sacrifice part of their profitability to increase USDC's market share.
Hyperliquid strengthens its position in crypto markets
Hyperliquid is the largest decentralized perpetual futures exchange and one of the fastest-growing trading platforms in the cryptocurrency industry.Its trading volume exceeded $150 billion in July, while its volume relative to Binance rose to 11.5%. Analysts said the figures indicate that Hyperliquid continues to gain market share in crypto derivatives trading.
Under the new agreement, Coinbase will count USDC held on Hyperliquid as part of its ecosystem assets. The exchange will retain the income generated from the stablecoin's reserves and pay 90% of that revenue to Hyperliquid.
According to JPMorgan, similar revenue streams were previously split roughly equally between Coinbase and Circle.
JPMorgan cuts forecasts for Circle and Coinbase
Against the backdrop of the revised partnership structure and broader cooling across cryptocurrency markets, JPMorgan has lowered its financial outlook for both companies.Additional pressure comes from the declining supply of USDC, whose market capitalization has fallen from approximately $80 billion in March to about $73 billion.
JPMorgan believes that higher interest rates could partially offset the negative impact on USDC-related revenue over the long term. Nevertheless, intensifying competition in the regulated stablecoin market remains one of the key risks facing Circle's business.
Meanwhile, the stablecoin market has lost roughly $10 billion in market capitalization since its peak in May, marking its largest decline since 2022. The contraction has been driven primarily by USDT and USDC, whose market capitalizations have fallen by approximately $6 billion and $7 billion, respectively.
Earlier, representatives of the Hyperliquid Policy Center and crypto wallet Phantom called on the U.S. Commodity Futures Trading Commission (CFTC) to update regulations governing on-chain trading.
Latest Hyperliquid News
-
Afghanistan
-
Albania
-
Algeria
-
Angola
-
Argentina
-
Armenia
-
Australia
-
Austria
-
Azerbaijan
-
Bahamas
-
Bahrain
-
Bangladesh
-
Belarus
-
Belgium
-
Bolivia
-
Botswana
-
Brazil
-
Brunei
-
Bulgaria
-
Cambodia
-
Cameroon
-
Canada
-
Chile
-
China
-
Colombia
-
Congo
-
Costa Rica
-
Cote d'Ivoire
-
Croatia
-
Cuba
-
Cyprus
-
Czechia
-
DR Congo
-
Denmark
-
Dominican Republic
-
Ecuador
-
Egypt
-
El Salvador
-
Estonia
-
Eswatini
-
Ethiopia
-
Finland
-
France
-
Georgia
-
Germany
-
Ghana
-
Greece
-
Haiti
-
Hong Kong
-
Hungary
-
India
-
Indonesia
-
Iran, Islamic republic
-
Iraq
-
Ireland
-
Israel
-
Italy
-
Jamaica
-
Japan
-
Jordan
-
Kazakhstan
-
Kenya
-
Korea
-
Kuwait
-
Kyrgyzstan
-
Laos
-
Latvia
-
Lebanon
-
Lesotho
-
Libya
-
Lithuania
-
Luxembourg
-
Madagascar
-
Malaysia
-
Malta
-
Mauritius
-
Mexico
-
Moldova
-
Mongolia
-
Montenegro
-
Morocco
-
Mozambique
-
Myanmar
-
Namibia
-
Nepal
-
Netherlands
-
New Zealand
-
Nigeria
-
North Macedonia
-
Norway
-
Oman
-
Pakistan
-
Palestine
-
Panama
-
Papua New Guinea
-
Paraguay
-
Peru
-
Philippines
-
Poland
-
Portugal
-
Puerto Rico
-
Qatar
-
Reunion
-
Romania
-
Rwanda
-
Saudi Arabia
-
Serbia
-
Singapore
-
Slovakia
-
Slovenia
-
Somalia
-
South Africa
-
Spain
-
Sri Lanka
-
Sweden
-
Switzerland
-
Syria
-
Taiwan
-
Tajikistan
-
Tanzania
-
Thailand
-
Trinidad and Tobago
-
Tunisia
-
Turkey
-
UAE
-
Uganda
-
Ukraine
-
United Kingdom
-
United States
-
Uruguay
-
Uzbekistan
-
Venezuela
-
Vietnam
-
Yemen
-
Zambia
-
Zimbabwe
- Forex
- Crypto
