Things are getting tougher for Circle, the company behind the USDC stablecoin. That’s the word from JPMorgan analysts. They see a growing wave of competition on the horizon. Even with Circle pushing forward on its own blockchain, rivals like Tether and Hyperliquid are making big moves. Fintech giants are also stepping into the ring.
A new report from JPMorgan, first covered by The Block, spells out the challenge. A team of analysts, led by Nikolaos Panigirtzoglou, points to several new players. Tether’s plans for USAT and Hyperliquid’s upcoming USDH token are top concerns. These new stablecoins could shake up the market.
JPMorgan: competencia para Circle
Tether planea USAT con reservas en Anchorage
Hyperliquid lanza USDH; Robinhood y Revolut evalúan
Circle impulsa Arc para mantener USDC pic.twitter.com/1xfOuFeCVz— Diario฿itcoin (@Blaze Trends)
Tether’s Institutional Play with USAT
Tether is getting ready to launch USAT, a stablecoin designed to fully meet the requirements of the new GENIUS Act. JPMorgan notes that Tether plans to hold USAT’s reserves with Anchorage Digital. Anchorage Digital is a bank licensed in the United States. This move aims to build more trust with big financial firms. It also helps Tether rely less on outside banks. The strategy could cut operating costs and help avoid problems like those Circle faced when Silicon Valley Bank collapsed in 2023.
By managing USAT’s reserves directly, Tether also hopes to keep more of the earnings. This could boost their profit margins. This approach suggests Tether wants to look more regulated and appealing to institutional clients in the US.
Hyperliquid Challenges USDC with USDH
Meanwhile, Hyperliquid is busy getting its own stablecoin, USDH, ready. Analysts point out that Hyperliquid’s futures platform already accounts for about 7.5% of all USDC use. This means Circle’s market share could shrink once USDH becomes available.
This step shows Hyperliquid wants to be independent from Circle. It also highlights how much the stablecoin market is growing and changing. Analysts see USDH as a direct threat to USDC, which has long been strong in certain parts of the crypto market.
Fintechs and New Blockchains Join the Fight
Tether and Hyperliquid aren’t the only ones in the game. Financial technology companies like Robinhood and Revolut are also thinking about developing their own stablecoins. This trend shows that large, traditional finance platforms want to get into stable digital assets. They hope to attract their millions of users to this new type of money.
Circle isn’t sitting still either. It is building Arc, a blockchain made specifically for stablecoins. This network aims to keep USDC at the center of the crypto world. It plans to do this by making USDC faster, more secure, and easier to use across different platforms. This move is Circle’s answer to new competitors. It also aims to strengthen its position before new regulations fully take effect in the United States.
A Market Where One’s Gain is Another’s Loss
JPMorgan analysts warn that the total supply of stablecoins has generally followed the overall crypto market’s size. If the entire crypto market doesn’t grow much, then stablecoin issuers will likely just trade market share. There won’t be a bigger pie for everyone.
The stablecoin market is currently around $278 billion. Its share of the total crypto market has stayed steady, below an 8% average, since 2020. This suggests that stablecoin growth largely depends on how much the global crypto market expands. New players and the upcoming GENIUS Act in the United States could completely change how companies compete for users’ money and trust. If the market doesn’t get bigger, then Circle, Tether, Hyperliquid, and the fintechs will find themselves in a zero-sum game.