Circle Under Pressure as Mizuho Downgrades, JPMorgan Warns on Hyperliquid

Par DCN Editorial Team
Publié le 15 July 2026

Crypto News

Circle Under Pressure: Mizuho Downgrades Stock, JPMorgan Warns of Hyperliquid Threat

Circle, the issuer of the USDC stablecoin, is facing mounting and simultaneous institutional pressure on two fronts. Japanese investment bank Mizuho has formally downgraded Circle’s stock to “underperform” and slashed its price target to $50, while JPMorgan has published a separate analysis identifying the rise of Hyperliquid as a direct threat to USDC’s business model. Two bearish warnings from two of the world’s largest financial institutions, arriving in the same market cycle, send a signal strong enough for markets to take notice.

Mizuho Downgrades Circle to ‘Underperform’

Let’s start with the first front. Mizuho Securities, one of Japan’s largest investment banks, has downgraded Circle from its previous rating—already cautious—to “underperform,” the lowest category on its scale. The price target is now $50 per share, a level implying a significant discount to the company’s implied valuation from its last funding round. Mizuho’s reasoning is clear: the emergence of Open Dollar, a decentralized stablecoin protocol rapidly gaining market share, directly threatens USDC’s dominant position in the compliant stablecoin segment.

JPMorgan Identifies Hyperliquid as a Threat

The second front is opened by JPMorgan, the largest US bank, whose analysts have published a report identifying Hyperliquid as an emerging threat to USDC’s economics. Hyperliquid is a decentralized trading platform that has experienced exponential growth in recent months, attracting substantial trading volumes. What worries JPMorgan is Hyperliquid’s specific business model: the platform uses its own token and liquidity mechanisms, thereby reducing reliance on centralized stablecoins like USDC for on-chain trading operations. If this trend broadens, USDC could lose substantial transaction volumes, directly impacting Circle’s revenues.

Circle’s Business Model Under Scrutiny

To understand the severity of this dual pressure, one must recall Circle’s business model. The company does not earn money from USDC transaction fees—the stablecoin is freely transferable. Its main revenue source is what is known as the “spread” on reserves: the dollars backing USDC are placed in safe assets (US Treasury bills, short-term government bonds, cash) that generate a yield. Circle collects that yield. As long as the volume of USDC in circulation is high and interest rates remain significant, this model is extremely profitable. But it rests on one assumption: that USDC remains the go-to stablecoin for on-chain transactions and for financial institutions.

Yet this assumption is precisely what Mizuho and JPMorgan are challenging, each from a different angle. Mizuho points to the direct competition from Open Dollar, a decentralized stablecoin that could attract a portion of the institutional clientele drawn to transparency and disintermediation. JPMorgan, for its part, describes a scenario where USDC is bypassed rather than directly competed against: if decentralized trading platforms like Hyperliquid create their own liquidity ecosystems without relying on traditional stablecoins, USDC loses its utility and, consequently, its circulating volume.

Competitive Landscape Evolving

This situation marks a turning point for Circle. The company has long benefited from a favorable competitive environment. USDC was seen as the compliant, regulated alternative to Tether’s USDT, the latter regularly criticized for the opacity of its reserves and alleged ties to controversial activities. Circle, for its part, cultivated an image of transparency and regulatory compliance, obtaining licenses in several key jurisdictions and publishing regular attestations of its reserves. This strategy paid off: USDC became the stablecoin of choice for traditional financial institutions seeking exposure to digital assets.

But the competitive landscape is evolving rapidly. On one side, decentralized stablecoins like Open Dollar, DAI, and other emerging protocols offer an alternative appealing to a growing share of the crypto community, particularly users most sensitive to decentralization and censorship resistance. On the other side, decentralized trading platforms are developing their own liquidity mechanisms that reduce reliance on centralized stablecoins. USDC thus finds itself caught between two market developments that, each in their own way, diminish its relative importance in the ecosystem.

JPMorgan’s report on Hyperliquid is particularly interesting because it comes from a bank that is simultaneously one of the world’s largest financial institutions and a major player in blockchain innovation—JPMorgan has its own tokenization project and its own digital currency, the JPM Coin. That JPMorgan identifies Hyperliquid as a threat to Circle is therefore not trivial. It means decentralized trading has reached a level of maturity and volume that makes it visible and relevant to Wall Street analysts. Hyperliquid is no longer a niche project: it is an emerging financial infrastructure that the biggest names in traditional finance are now taking seriously.

On Mizuho’s side, the downgrade of Circle to “underperform” with a $50 price target is a strong signal. To put this target in perspective, recall that Circle was valued at around $9 billion during its attempted SPAC IPO in 2021, then at $7 billion in a private funding round. Mizuho’s $50 per share target suggests a valuation well below those levels, reflecting the deterioration of the company’s competitive outlook. It is important to note that Circle is not yet listed in a conventional manner—it went public via a SPAC merger in 2024—and sell-side analysts are only just beginning to cover the stock with established valuation models.

Market Context and Reactions

The question now is whether...