Author: Zhou, ChainCatcher
On May 21, HYPE broke through $59, hitting a new high since September 2025, with a 24-hour gain exceeding 20%. Its market cap approached $15 billion, ranking 11th globally.
According to Santiment analysis, short squeezes and ETF fund inflows are the direct triggers for this rally.
Over the past few days, a large number of traders bet against HYPE, leading to a significant spike in negative funding rates across various trading platforms. As prices continued to rise, bearish traders were forced to buy back their positions, further driving up the price. Currently, HYPE's open interest remains high at over $1.92 billion, with new traders continuously entering the market, keeping the position scale stable.
Simultaneously, ETF channels amplified the capital inflows. According to SoSoValue data, two US spot ETFs tracking Hyperliquid (21Shares' THYP and Bitwise's BHYP) recorded a combined net inflow of approximately $22.3 million in their first week of trading, with a single-day net inflow exceeding $25.46 million yesterday.
Analysts noted that in the first 6 trading days, the two Hyperliquid ETFs had 3 days where their market-cap-adjusted net inflows outperformed Bitcoin ETFs, and 5 days outperforming Ethereum ETFs. Among them, Bitwise announced that 10% of BHYP's management fees would be used to continuously buy and stake HYPE on the company's balance sheet.
Notably, over the past three days, a16z, Goldman Sachs, Grayscale, and Galaxy Digital have almost simultaneously made moves, and the largest external holder of HYPE has quietly changed hands.
According to on-chain analyst Ai Yi's monitoring, a16z began a large-scale accumulation mode in August 2025 and has accelerated the pace this year. Currently, it has accumulated 9.18 million HYPE tokens, worth approximately $356 million, at an average price of $38.77. The holdings are stored across dozens of addresses, mostly in a staked state, making it the largest external holder of HYPE by size, surpassing Paradigm, which previously held this position.
In the past 24 hours, a16z withdrew another 2.597 million tokens from major exchanges at an average price of $51.17, with an unrealized profit exceeding $79 million, and continues to add to its position.
Other institutions have also been active. Goldman Sachs recently sold over $152 million worth of XRP, $500 million worth of ETH, and $450 million worth of BTC, switching to buying HYPE. Grayscale-associated addresses bought and staked approximately $24.95 million worth of HYPE in the past week, adding another ~$12.1 million in the last 17 hours. Grayscale filed an S-1 registration for a HYPE spot ETF in January this year.
Additionally, Galaxy Digital-associated wallets bought about $8.8 million worth of HYPE in the past 2 hours; the insider whale agent Garrett Jin, also deposited 10 million USDC into Hyperliquid to directly buy HYPE.
Recently, Bitwise CIO Matt Hougan described HYPE as one of the "most mispriced" assets in the current crypto market. He believes the market still prices HYPE within the framework of a perpetual contract DEX token, while Hyperliquid's true scale far exceeds this framework. Nearly half of the platform's trading volume is now related to non-crypto assets, covering commodities, stock indices, RWAs, and even prediction markets.
Supporting this judgment is the real revenue generated by the Hyperliquid protocol itself. The platform directs 97% of fee revenue into the Assistance Fund, which continuously buys back and burns HYPE in the open market. Since 2025, it has repurchased over $2.49 billion, accounting for 46% of the industry's total buybacks.
On-chain data shows that Hyperliquid recently accounted for over 42% of total blockchain fee revenue across all networks.
Revenue sources are also expanding. Following Coinbase's collaboration with Circle as the USDC Treasury capital deployer, the AQAv2 upgrade was activated, expected to add approximately $440,000 in daily repurchase potential to the protocol from USDC reserve yield.
In terms of RWA, following the launch of HIP-3, trading volume for commodity perpetual contracts like oil, gold, and silver has continued to explode. During the Iran conflict, the daily peak trading volume for crude oil perpetual contracts once exceeded $2.2 billion.
Currently, the open interest for RWA perpetuals on the Hyperliquid platform has reached a new all-time high of $2.6 billion, doubling compared to two months ago. Total users have reached 1.2 million, with a total trading volume of $4.33 trillion, capturing about 70% of the on-chain perpetual DEX market share.
Regarding the HIP-4 prediction market, Hyperliquid officially launched its prediction market function in May this year. The daily trading volume of its first binary contract for BTC price direction was about three times the combined volume of similar markets on Polymarket and Kalshi. ChainCatcher provided detailed analysis in "Can Hyperliquid Win in the Prediction Market?".
Latest data from Polymarket shows the market is betting an 80% probability that HYPE will reach $66 by the end of 2026, a 46% probability of reaching $80, and a 32% probability of reaching $100.
Previously, BitMEX co-founder Arthur Hayes publicly touted HYPE, suggesting it could reach $150 by August. Today, he posted again on social media, stating that HYPE is getting closer to setting a new all-time high.
Hayes's Maelstrom fund has been selling holdings like ENA, PENDLE, and ETHFI, switching to increase its HYPE position. According to HyperInsight monitoring, Arthur Hayes currently holds 247,334 HYPE, worth $14.5 million, with an unrealized profit exceeding $6.5 million.
However, Hyperliquid's rapid expansion has also brought trouble. Especially after the launch of HIP-3, the trading volume of on-chain commodity contracts quickly eroded the weekend and after-hours trading periods of traditional exchanges, directly stepping on Wall Street's interests.
Recently, CME and ICE have jointly pressured the US CFTC, demanding that Hyperliquid register and accept regulation, arguing that its anonymous, 24/7 trading environment could distort global oil price benchmarks.
Meanwhile, according to Hyperinsight on-chain monitoring, two addresses on Hyperliquid, marked as mainstream market makers, withdrew nearly 90% of BTC and ETH liquidity during the same period, with an estimated total withdrawal of nearly $100 million. ChainCatcher provided detailed analysis of this background in "Hyperliquid Disrupts Wall Street's Game: Regulation Uncertain, Market Makers Flee First?".
As the token price continues to climb, HYPE has achieved a gain of over 125% since the beginning of this year, and its FDV once surpassed SOL, indicating that operational risks can no longer be ignored. According to on-chain monitoring, some large holders have already established hundreds of millions of dollars worth of short positions for hedging while holding substantial HYPE spot positions.
Regulatory uncertainty persists, and the CFTC's stance towards Hyperliquid remains a variable hanging overhead. Beyond the battle between bulls and bears, this game concerning the boundaries of on-chain finance is also far from over.
