Did JPMorgan Favor Hyperliquid Over Circle for the Future of Finance?

Tether is introducing USAT, a stablecoin that complies with US regulations under the new GENIUS Act. In contrast to USDT, where only around 80% of assets align with compliance requirements, USAT will secure its reserves with Anchorage Digital. Analysts at JPMorgan, headed by Nikolaos Panigirtzoglou, indicated that this launch, along with Hyperliquid’s USDH and other fintech currencies, will exert pressure on Circle.

This transition may enhance profit margins and prevent errors similar to Circle’s ties with Silicon Valley Bank in 2023.

JPMorgan observed that the competition for trading market share is primarily zero-sum unless there is growth in the overall trading market. So, who will prevail in the stablecoin wars?

Can Hyperliquid and Fintech Giants Truly Acquire Market Share From Circle?

Hyperliquid, among the most buzzworthy Web3 initiatives of 2025, is seeking to eliminate its reliance on Circle’s USDC by launching its own USDH stablecoin. Analysts at 99Bitcoins reported that Hyperliquid accounts for about 7.5% of total USDC utilization, potentially resulting in a direct impact on Circle’s market share.

We were curious about Circle’s response to the $USDH situation, and in response, they issued a blog post discussing:

1⃣ Acquiring $HYPE & increasing purchases

2⃣ Acting as a network node

3⃣ Investing in developer tools along with CCTP v2

4⃣ Incentive programs for HIP-3/HyperEVM developers pic.twitter.com/roJvZUPvm7

— Castle Labs (@castle_labs) September 18, 2025

In the meantime, there are rumors that Robinhood and Revolut are working on their own stablecoins, posing an additional threat to Circle’s strategy of developing Arc, a blockchain designed for speed and interoperability to maintain USDC’s central role in the ecosystem.

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Why Has Growth in Stablecoins Hit a Standstill Despite All the Buzz?

As per data from Decentralized finance Llama and CoinGecko, the total trading market capital for stablecoins is approximately $290 Bn. That seems substantial, but looking from a broader perspective reveals a different narrative:

• Stablecoins account for less than 8% of the overall trading market capitalization, a figure that has scarcely changed since 2020.
• Growth in token supply has mirrored the general crypto market, rather than outpacing it.

Glassnode analytics show a gradual increase in the velocity of stablecoins, reflecting a shortage of new demand entering the market.

This stagnation is why JPMorgan cautions that the stablecoin sector might not see significant growth unless the entire crypto asset landscape expands, compelling issuers to compete for limited crypto market share.

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What Does This Conflict Imply for Stocks, Energy, and the Economy

The influence of stablecoins has broadened, impacting various areas from fintech business models to banking regulations and commodity trading.

On a macroeconomic level, stablecoins may find applications in international transactions for commodities such as oil or natural gas. This could affect energy pricing if adoption increases. However, a key uncertainty lies in which stablecoins will dominate the trading market? Furthermore, is it truly a zero-sum situation as JPMorgan suggests, or is that merely fear, uncertainty, and doubt?

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The article Did JPMorgan Just Endorse Hyperliquid Over Circle for Finance’s Future? was first published on 99Bitcoins.