JPMorgan has downgraded profit forecasts for both Circle and Coinbase, warning that their newly announced agreement with Hyperliquid materially weakens the economic model underlying USDC, the dollar-pegged stablecoin that underpins both firms' revenues.
Under the agreement, Coinbase will retain 90 percent of the revenue generated from USDC reserves deployed on the Hyperliquid blockchain, leaving Circle with only 10 percent. The structure represents a significant departure from the 50-50 revenue-sharing arrangement that has traditionally governed USDC economics between the two companies, according to JPMorgan's analysis.
The downgrade reflects broader concerns about stablecoin yield compression as competing blockchain ecosystems demand increasingly favorable terms to attract liquidity. Hyperliquid's rapid growth has positioned it as a credible threat to existing trading infrastructure, forcing established players to offer economically unfavorable deals to maintain market access and prevent users from migrating to alternative stablecoins.