JPMorgan: Circle faces fierce competition from Tether, Hyperliquid, and fintech companies

ChainCatcher news, according to The Block, JPMorgan analysts indicate that Circle is facing intense competition as Tether, Hyperliquid, and several fintech companies are preparing to launch new stablecoins. However, unless the cryptocurrency market expands significantly, the stablecoin sector may ultimately resemble a zero-sum game for U.S. issuers.

Analysts state that Tether plans to launch a stablecoin USAT that complies with the GENIUS Act, while its existing USDT reserve compliance rate is only about 80%. Tether intends to have the USAT reserves custodied by Anchorage Digital to build trust, reduce costs, mitigate risks, and retain more earnings to improve profit margins. Meanwhile, Hyperliquid is preparing to launch its native stablecoin USDH, aiming to reduce reliance on USDC, with its futures trading accounting for about 7.5% of USDC usage; the launch of USDH may shrink USDC's market share.

Analysts believe that the supply of stablecoins is closely related to the total market capitalization of cryptocurrencies. If this sector does not expand significantly, issuers may find themselves in a zero-sum game, competing for market share rather than developing together; currently, the scale of stablecoins is about $278 billion, but their proportion of the total cryptocurrency market capitalization remains stable, averaging below 8%.