JPMorgan cuts Circle and Coinbase forecasts over Hyperliquid USDC deal

JPMorgan has lowered its earnings estimates for Circle and Coinbase, citing a new agreement with the decentralized exchange Hyperliquid. Under the deal, Hyperliquid will receive about 90% of the reserve‑yield generated by the $6 billion USDC balance it holds – roughly 8% of the stablecoin’s circulating supply. JPMorgan describes the arrangement as a “prisoner’s dilemma” that could weaken USDC economics and pressure the revenue streams of both companies.

Analysts also note growing competition from the OpenUSD consortium and increased regulatory scrutiny. While JPMorgan’s outlook turned negative, other banks maintain a more optimistic view: Bank of America reaffirmed a buy rating on Coinbase with a $218 price target, pointing to the pending CLARITY Act as a catalyst for institutional capital inflows into U.S. crypto exchanges. Meanwhile, top banks downgraded Circle’s stock, cutting its target to $50 after a 75% decline from its 2022 peak, but still see long‑term upside if the CLARITY Act materialises.

The US and UK have also announced a joint roadmap to align token‑finance regulations, aiming to reduce cross‑border friction for tokenized assets. These developments together shape the near‑term trajectory of the USDC stablecoin market and the broader crypto‑related equities sector.