Morgan Chase: The rise of Hyperliquid is threatening the USDC business model of Circle

On 15 July, Chase Morgan lowered performance expectations for Circle (CRCL) and Coinbase (COIN), stating that the new cooperation agreement between the two companies and Hyperliquid weakened the USDC business model of Circle and posed a greater long-term threat to the stable currency distributor. According to Chase Morgan, this agreement has created a typical “prisoner\s Dilemma”: the stabilizer, Circle, and the encryption exchange Coinbase have had to compete with each other in order to expand the flow and use of USDC, a competition that would undermine the respective economic interests of both parties. According to Morgan Chase estimates, Hyperliquid currently holds approximately $6 billion in USDC, or about 8 per cent of total USDC flows. In a report released on Tuesday by the team of analysts led by Kenneth Worthington, “We believe that the change in the Hyperliquid partnership highlights the challenges of the Circle/Coinbase model, which could lead to a `prisoner dilemma' that would prompt both sides to compete with each other rather than to share the benefits in promoting USDC distribution. Hyperliquid has become one of the fastest-growing trading platforms in the encryption industry and the largest decentrized and sustainable contract exchange. In July alone, the platform traded more than $150 billion, equivalent to 11.5 per cent of Binance, indicating a continued increase in its share in derivatives markets。