Hyperliquid is set to introduce its own stablecoin, a strategic move aimed at reducing its dependency on Circle’s USDC. This announcement comes even as the supply of USDC has experienced a significant surge, currently standing at $72.5 billion, surpassing Wall Street broker Bernstein’s estimates for 2025 by around 25%. Bernstein originally predicted that the stablecoin’s supply would reach $74 billion by the end of the year.
Analysts at Bernstein, led by Gautam Chhugani, reported that USDC’s market share is rapidly increasing, particularly in relation to Tether, the issuer of USDT, the world’s largest stablecoin. USDC’s market share grew to 30%, up from 28% in the second quarter.
Stablecoins, which are cryptocurrencies tied to the value of other assets such as the U.S. dollar or gold, are instrumental in the cryptocurrency ecosystem. They serve various functions, including payment infrastructure and international money transfers. Currently, approximately $5.5 billion in USDC, constituting about 7.5% of its total supply, is being utilized as collateral on Hyperliquid.
While Hyperliquid’s introduction of a new stablecoin could spur competition, analysts caution that establishing sufficient liquidity in derivatives markets will be a daunting challenge. Such liquidity is crucial for reliable execution and optimal sizing within these markets.
Bernstein remarked that following the passage of the GENIUS Act, the emergence of new stablecoin challengers is likely inevitable. However, bootstrapping liquidity for derivatives remains a complex undertaking.
Concerns regarding Circle’s vulnerability to potential interest rate cuts—which could diminish revenue from interest income—are perceived by Bernstein as overlooking the broader landscape. The analysts note that an increase in USDC supply could actually benefit Circle, and that rate cuts could foster a more risk-on approach in digital assets, potentially driving additional demand for USDC and yield-generating strategies.
The firm maintains an outperform rating on Circle’s shares, setting a price target of $230. At the time of the report, Circle’s stock was trading 1.2% higher, around $116.
