Hyperliquid Squeezes USDC Economics
Hyperliquid is expanding its decentralized perpetuals dominance through record open interest, tokenized equities, growing fee revenue, and HYPE token buybacks.
JPMorgan published analysis arguing that Hyperliquid's growth and its deal with Circle create structural pressure on USDC's economics and on Coinbase's revenue. Mizuho separately downgraded Circle to underperform with a $50 price target, citing yield-passthrough threats from competing platforms including Hyperliquid. Multiple Wall Street analysts flagged mounting competitive risks to Circle and Coinbase's stablecoin-linked income streams.
Hyperliquid: Eating Circle and Coinbase's lunch
Hyperliquid holds $6 billion in USDC — roughly 8% of everything in circulation. That scale forced the USDC partners into a remarkable arrangement: Coinbase collects all the reserve income on Hyperliquid's balances, then hands 90% straight back to the DEX.
That's not Circle and Coinbase winning. That's them being squeezed by a distributor that has grown too big to lose.
JPMorgan calls it a prisoner's dilemma, and that's exactly right. Once one distributor secures better terms, every other large partner demands the same. The economics that made USDC so profitable — retaining roughly 38% of reserve yield before sharing the rest — start to collapse the moment the biggest venues have enough scale to demand their cut upfront.
For HYPE bulls, this thesis compounds. Hyperliquid isn't just winning derivatives volume; it's now big enough to reshape how stablecoin revenue gets divided across the entire industry.
6 sources
- JPMorgan warns Hyperliquid deal could squeeze Circle and Coinbase · crypto.news · T2
- Mizuho downgrades Circle to underperform, cuts price target to $50 on Open USD threat · coindesk.com · T1
- JPMorgan: Hyperliquid’s Growth Puts Pressure on Circle’s USDC Revenue Model · blockchainreporter.net · T2
- BLOOMBERG LAW: JPMorgan Says Circle, Coinbase Face Stablecoin Profit Pressure · news.bloomberglaw.com · T2
- Wall Street turns cautious on Circle as analysts warn USDC economics face mounting pressure · theblock.co · T1
- JPMorgan says Hyperliquid's rise threatens Circle's USDC economics · coindesk.com · T1