According to Chase Morgan, the new cooperative arrangement between Hyperliquid and Circle and Coinbase is putting pressure on the short-term revenues of both companies, with a greater impact on Circe's USDC business model. As a result, the Bank reduced the profit expectations of the two companies, while referring to the weak volume of encrypted market transactions and asset prices, which also slowed down overall performance.

Changes in the distribution of proceeds

Morgan Chase claims that the restructured partnership changed the revenue attribution of USDC on the Hyperliquid platform. Under the new arrangement, Coinbase would treat USDC on Hyperliquid as an “in-platform” and collect the proceeds from the reserve and pay 90 per cent of them to Hyperliquid.

The line estimates that, under the previous model, this part of the income is divided almost equally between Coinbase and Circle. The change now means that two companies may reduce each other ' s original profit space in order to expand USDC distribution.

Hyperliquid has become an important distribution channel

Morgan Chase estimates that Hyperliquid currently holds approximately $6 billion in USDC, about 8 per cent of the supply in circulation. As the platform's share in derivatives markets increases, so does the importance of this channel for USDC.

The report mentions that Hyperliquid has become one of the fastest-growing encryption trading platforms and the main platform for decentralizing the market for sustainable contracts. In July alone, the platform traded more than $150 billion; its relative trade to Binance rose to 11.5 per cent.

  • Hyperliquid holds USDC about $6 billion
  • About 8% of USDC traffic
  • Over $150 billion in July.

USDC Recent Flow Falls

According to Chase Morgan, this cooperative model exposes a conflict of interest between Circle and Coinbase in the promotion of USDC. Both companies wanted to expand the distribution of the stabilization currency, but the more the distribution channels were concentrated, the more evident the distribution of the proceeds.

The Bank also noted that the growth dynamic of the USDC has been reduced in recent months. Its circulation has been close to $80 billion in March and has fallen back to about $73 billion. The overall size of the stable currency market has also shrunk by about $10 billion since May, owing to the cooling down of encrypted transactions and the continued entry of regulated new competitors.

At the same time, Morgan Chase indicated that, if interest rates were to remain high, it might still support USDC-related income in the long run.