JPMorgan Sounds Alarm Over Circle-Coinbase-Hyperliquid USDC Revenue Remix 💸

JPMorgan has trimmed its earnings forecasts for Circle and Coinbase, citing a new revenue-sharing arrangement between the two stablecoin heavyweights and perpetual futures exchange Hyperliquid that reshapes how income from USDC reserves is distributed. The bank said the agreement could weigh on the longer-term economics of the stablecoin business for both firms.

Under the arrangement, Coinbase will classify USDC held on Hyperliquid as "on-platform" balances. Coinbase will receive the reserve income tied to those balances but pass roughly 90% of it back to Hyperliquid, rather than splitting the proceeds with Circle as it historically has. JPMorgan estimated Hyperliquid holds about $6 billion in USDC, equivalent to roughly 8% of the token's total circulating supply.

Wall Street analysts are scrutinizing the structure of revenue-sharing between stablecoin issuers and distribution platforms. JPMorgan described the dynamic as a "prisoner's dilemma," noting that both Circle and Coinbase are pursuing strategies to drive additional volumes while navigating the impact of the new split. Some analysts maintain a bullish view on Circle's long-term position, while others argue that competition for USDC adoption could compress profit margins.

Not all firms have turned bearish. Bernstein and William Blair have retained their bullish outlook on Circle, according to the report. The split in analyst sentiment underscores the degree to which the Hyperliquid deal has reset assumptions about how USDC revenue is shared across the ecosystem.

The deal does not alter the supply or redemption mechanics of USDC, and no changes to the $USDC reserve composition were disclosed. The $6 billion figure cited by JPMorgan refers to USDC balances on Hyperliquid, not to the broader circulation of the stablecoin across other venues. Circle and Coinbase have not publicly commented on the revised JPMorgan estimates.