Overview
- JPMorgan analysts warned Tuesday that Hyperliquid’s arrangement is a near-term revenue headwind for Circle and Coinbase and could pose a larger long-term threat to Circle’s USDC business.
- The May deal designated USDC as Hyperliquid’s primary quote asset and lets Hyperliquid capture up to 90% of the yield generated by USDC reserves sitting on its platform, shifting income away from Circle and distribution partners.
- JPMorgan estimates Hyperliquid holds roughly $5–6 billion of USDC, about 8% of circulating supply, and says Coinbase will treat those balances as on‑platform while remitting most reserve income to Hyperliquid.
- The bank cut earnings forecasts for Circle and Coinbase and cited analysts’ estimates that about $160 million a year of reserve-yield revenue could be redirected to Hyperliquid at current rates.
- Hyperliquid’s rapid growth — including more than $150 billion of reported July trading volume and rising derivatives share — raises the risk that other venues follow similar deals and further compress Circle’s yield-based revenue model.