Coinbase Takes Over Hyperliquid Treasury...HYPE Surges 5% in USDC Collateral War

▲ Hyperliquid (HYPE)/AI generated image

Coinbase has joined as an official USDC treasury distributor for Hyperliquid, aiming to expand its stablecoin dominance in the decentralized perpetual futures exchange market. Coingape reported on May 14 (local time) that Coinbase expanded its support for Hyperliquid and significantly increased its HYPE staking position.

Coinbase announced via X (formerly Twitter) that it has become Hyperliquid's official USDC treasury distributor. Coinbase explained that on-chain markets operate 24 hours a day, are available at any time, can be transferred instantly, and require collateral with deep liquidity. Coinbase emphasized that USDC meets these conditions.

According to Coinbase, USDC has established itself as a major stablecoin on the cryptocurrency leverage trading platform since Hyperliquid's launch in 2023. This decision is expected to further strengthen USDC's position as a core collateral token within the Hyperliquid ecosystem.

Coinbase also announced that it has significantly increased its staked HYPE position as part of this partnership. Coingape reported that following the announcement, the Hyperliquid token surged by over 5% and was trading at approximately $41, according to TradingView data.

However, Coinbase's stock price showed weakness, irrespective of the announcement. According to TradingView data, Coinbase shares traded at approximately $197 at the market open that day and fell by over 2%.

Coinbase also stated that during this transition, it agreed to terms granting Native Markets the right to purchase USDH branded assets. Native Markets launched Hyperliquid's own stablecoin, USDH, last year.

Coinbase explained that while the USDH market is still fully operational, it will be phased out over time. Coinbase stated that USDH remains fully collateralized, and users will be offered fee-free USDC conversion and fiat redemption during the transition period.

Simon Dedic, founder of Moonrock Capital, assessed this move as a significant victory for USDC, not USDT, in securing the Hyperliquid market. Dedic commented that it is very positive for Circle. Regarding the phasing out of USDH over time, he stated that it shows how even in community-driven ecosystems like Hyperliquid, the concept of native ecosystem alignment no longer exists.

Dedic pointed out that users ultimately value liquidity, distribution networks, and network effects. Coingape reported that Coinbase's participation as Hyperliquid's USDC treasury distributor marks a transition that strengthens USDC's collateral token status, expands HYPE positions, and involves the gradual phasing out of USDH.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*