JPMorgan Chase (NYSE: JPM) trimmed its earnings forecasts for Circle Internet Group (NYSE: CRCL) and Coinbase Global (Nasdaq: COIN) on July 14.
Both Circle and Coinbase are two of the world’s biggest crypto companies. While the former is best known for its USDC stablecoin, the latter is the largest crypto trading exchange in the United States.
Related: Coinbase CEO proposes surprising fix to $60B remittance fees
Hyperliquid deal forces JPMorgan to lower forecasts
Coinbase and Circle share a years-long relationship as both jointly built the USDC stablecoin ecosystem. Although Circle is now the sole issuer of USDC, Coinbase remains its largest distribution partner and shares heavily in the economics of the stablecoin reserves.
On May 14, Coinbase announced that it is expanding its support for USDC on Hyperliquid by becoming the official treasury deployer of USDC as an Aligned Quote Asset (AQA).
qHyperliquid is a decentralized exchange offering high-leverage perpetuals trading of cryptocurrencies, commodities, and tokenized stocks. It has become very popular, attracting a large number of high-frequency and speculative crypto traders.
Traders come to Hyperliquid to speculate on commodities, equities, and private-company valuations through blockchain-based markets.
Coinbase said the integration solidifies USDC’s role as the preferred stablecoin underlying onchain capital markets on Hyperliquid.
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But the deal forced JPMorgan to lower its earnings forecasts for both Circle and Coinbase.
As per the bank, the deal created a “prisoner’s dilemma” which drives Circle and Coinbase to compete with each other when promoting USDC distribution.
JPMorgan estimated that Hyperliquid holds around $6 billion of USDC, or nearly 8% of the circulating supply.
Under the new deal, Coinbase will classify USDC on Hyperliquid as “on-platform,” collect the income generated by reserves, and pay 90% of it to Hyperliquid. Earlier, Coinbase split nearly all of the revenue evenly with Circle, the bank estimated.
JPMorgan lowered its earnings estimates for both Circle and Coinbase due to the Hyperliquid agreement and dwindling crypto markets. However, the bank expects higher interest rates to boost support for USDC revenue through 2027.
Related: Analysts remain split on Circle amid rising competition
This story was originally published by TheStreet on Jul 14, 2026, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.
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