Hyperliquid's $6B USDC Pile Puts Circle and Coinbase at Odds, JPMorgan Says

JPMorgan flags a threat to Circle's USDC economics

On 14 July 2026, JPMorgan analysts led by Kenneth Worthington told clients that Hyperliquid's rapid growth pressures the economics behind Circle's USDC stablecoin. The bank cut its earnings estimates for both Circle and Coinbase. It cited the Hyperliquid arrangement alongside a weaker crypto market. The note treats the partnership as a case study in how distribution deals can reshape a stablecoin's profit split.

A revised split sends most reserve income to Hyperliquid

USDC earns reserve income when its backing assets, mostly short-term instruments, generate yield. According to JPMorgan, Coinbase now classifies USDC held on Hyperliquid as "on-platform." Under that label, Coinbase collects the reserve income and pays 90% of it to Hyperliquid. Previously, Coinbase split nearly all of that revenue evenly with Circle. The change moves a large share of the yield away from the two partners and toward the trading venue. JPMorgan treats that shift as the main reason to trim its profit forecasts for both companies.

The deal creates a prisoner's dilemma for partners

JPMorgan said the revised terms expose a structural risk in the Circle and Coinbase alliance. The bank argued that the setup pushes both firms to compete for USDC distribution, which can erode each side's profit. Each time one partner offers a distributor better terms, it narrows the margin left for the other. If Circle instead defends its share, it risks losing distribution to rival stablecoins. Worthington's team framed the tension as a classic standoff between two players who both lose ground.

"We think the change in the Hyperliquid relationship showcases the challenge for Circle and Coinbase partnership agreements because it can create 'a prisoner's dilemma' that drive Coinbase and Circle to compete with each other when promoting USDC distribution", 14 July 2026. — Kenneth Worthington, Analyst, JPMorgan

Hyperliquid now holds billions in USDC balances

USDC balances on Hyperliquid climbed to about $6 billion, roughly 8% of the circulating supply. That single venue now accounts for a meaningful slice of all USDC in the market. Hyperliquid has grown into one of the largest trading platforms in crypto. It processed more than $150 billion in trading volume in July, about 11.5% of Binance's volume over the same period. That scale gives Hyperliquid the leverage to negotiate a larger cut of the reserve income its balances generate.

USDC supply sits near 73 billion dollars

USDC circulating supply stood near $73 billion at the time of publication (CoinPaprika, 15 July 2026), down from roughly $80 billion in March. The wider stablecoin market has contracted by about $10 billion since May. HYPE, Hyperliquid's native token, traded at $67.95, up 6.5% over the past 24 hours (CoinPaprika, 15 July 2026). The concentration of USDC on one venue leaves Circle more exposed to a single distribution partner than before. A shrinking supply and a costlier distribution deal together weigh on the revenue Circle can keep from each USDC token.