Hyperliquid Eyes Stablecoin Launch as USDC Supply Surges Past Forecasts

Decentralized exchange Hyperliquid is preparing to launch its own stablecoin, aiming to reduce reliance on Circle’s USDC. Despite concerns over competition, USDC’s dominance continues to grow, with supply reaching $72.5 billion—25% ahead of Wall Street broker Bernstein’s 2025 forecast of $74 billion.

Bernstein analysts, led by Gautam Chhugani, noted that USDC’s market share versus Tether’s USDT has climbed to 30% from 28% in Q2. The stablecoin’s growth highlights increasing demand for reliable digital dollar alternatives, which play a critical role in crypto payments, cross-border transfers, and collateralized trading.

Currently, $5.5 billion in USDC (about 7.5% of supply) is used as collateral on Hyperliquid. While the exchange’s new stablecoin could challenge Circle, analysts warn that building liquidity in derivatives markets is difficult. Execution reliability and scale remain major hurdles for new entrants.

Bernstein expects more stablecoin launches following the GENIUS Act but stresses that liquidity bootstrapping in derivatives is complex. Even with upcoming competition, Circle may benefit from expanding adoption. Rate cuts, which could reduce Circle’s interest income, are unlikely to hurt the company. Instead, they may fuel risk-on sentiment in digital assets, increasing demand for USDC and yield strategies.

The broker maintains an “outperform” rating on Circle shares, setting a $230 price target. At the time of reporting, the stock traded around $116, up 1.2%.

As stablecoins gain traction, Hyperliquid’s move reflects broader trends in digital finance, but Circle’s USDC remains firmly positioned as a leading force in the market.