Overview
JPMorgan Chase & Co. announced on 14 July 2026 that it is lowering its financial estimates for Circle Internet Group Inc. and Coinbase Global Inc. The revision follows pressure on their stablecoin business arising from a newly announced partnership with crypto exchange Hyperliquid.
Partnership and Revenue Structure
On 14 May 2024, Circle and Coinbase disclosed a partnership with Hyperliquid aimed at expanding adoption of USDC, the second‑largest stablecoin globally. Hyperliquid functions both as a Layer‑1 blockchain and a decentralized exchange offering spot and derivatives trading, and it has gained traction for perpetual futures linked to cryptocurrency tokens and real‑world assets. By 11 June 2024, USDC became the preferred stablecoin on Hyperliquid. Under the revised arrangement, Coinbase will treat any USDC held on Hyperliquid as “on‑platform,” allowing it to retain all associated reserve income while remitting 90 % of the float back to Hyperliquid. JPMorgan estimates that Hyperliquid held roughly $6.0 billion of USDC at that time, representing about 8 % of the total USDC supply.
JPMorgan Estimate Adjustments
JPMorgan kept its second‑quarter GAAP earnings‑per‑share (EPS) estimate for Circle at $0.16 but cut its adjusted diluted EPS forecast for Coinbase to a negative $0.01. The bank indicated that the full impact of the Hyperliquid relationship will not be reflected in the second‑quarter results but will be incorporated into the second half of 2026. In addition to the partnership‑related concerns, JPMorgan reduced its outlook for both firms due to broader weakness in the cryptocurrency market.
Crypto Market Context
During the quarter, total cryptocurrency market capitalization declined by 13 %, spot‑trading average daily volume fell 24 % quarter‑over‑quarter, and the total value locked in decentralized finance (DeFi) dropped 23 %. These market‑wide deteriorations contributed to the downward revision of estimates.
Longer‑Term Outlook and Rate Expectations
JPMorgan projects that USDC‑related earnings will rise through 2027, driven by higher interest‑rate expectations. Accordingly, the bank now anticipates a 25‑basis‑point increase in the policy rate at the October 2026 meeting. Share performance to date shows Circle down about 25 % year‑to‑date, while Coinbase is up roughly 2 % year‑to‑date.
Analyst Commentary
Analysts described the situation as a “prisoner’s dilemma,” suggesting that the new revenue‑sharing model could force Coinbase and Circle to compete against each other when promoting USDC distribution.