JPMorgan cuts earnings estimates due to Circle and Coinbase’s Hyperliquid deal
JPMorgan downgraded earnings estimates for Circle and Coinbase due to their new agreement with Hyperliquid.
The agreement weakens USDC economics, as Coinbase will now pay 90% of USDC reserve yields to Hyperliquid.
Hyperliquid currently holds ~$6B USDC, which is 8% of the circulating supply.
This creates a ‘prisoner’s dilemma’ for USDC distribution, according to the downgrade.