Author: Zhou, ChainCatcher
On May 21, HYPE surged above $59, reaching its highest level since September 2025, with a 24-hour gain of over 20% and a market capitalization nearing $15 billion,rankingglobalnumber 11 in the world..
According to Santiment’s analysis, short squeezes and ETF fund inflows were the direct catalysts for this rally.
Over the past few days, a large number of traders bet on HYPE's decline, causing funding rates across platforms to spike significantly negative. After the price continued to rise, short sellers were forced to buy back their positions, further pushing the price higher. Currently, HYPE's open interest remains elevated above $1.92 billion, with new traders continuously entering and position sizes remaining stable.
Meanwhile, ETF channels have also amplified capital inflows. According to SoSoValue data, the two U.S. spot ETFs tracking Hyperliquid—21Shares’ THYP and Bitwise’s BHYP—recorded a combined net inflow of approximately $22.3 million in their first week, with yesterday alone seeing over $25.46 million in net inflow.
Analysts say that, over the first six trading days, two Hyperliquid ETFs had stronger market-cap-adjusted net inflows than Bitcoin ETFs on three days and stronger than Ethereum ETFs on five days. Bitwise announced it will allocate 10% of BHYP’s management fee to continuously buy and stake HYPE on its balance sheet.
Notably, over the past three days, a16z, Goldman Sachs, Grayscale, and Galaxy Digital acted almost in unison, and HYPE’s largest external institutional holder has quietly undergone a transition.
According to on-chain analyst Aunt Ai, a16z began large-scale accumulation starting in August 2025 and has steadily accelerated this year. To date, it has accumulated 9.18 million HYPE tokens, valued at approximately $356 million, with an average price of $38.77. The holdings are distributed across dozens of addresses, most of which are staked, making a16z the largest external holder of HYPE, surpassing Paradigm, which previously held this position for an extended period.
Over the past 24 hours, a16z withdrew another 2.597 million tokens from major exchanges at an average price of $51.17, realizing a paper profit of over $79 million, and continues to accumulate.
Other institutions have also been active. Recently, Goldman Sachs sold over $152 million in XRP, $500 million in ETH, and $450 million in BTC, while buying HYPE; a Grayscale-associated address purchased and staked approximately $24.95 million in HYPE over the past week, adding another $12.1 million in the last 17 hours. Grayscale submitted an S-1 registration application for a HYPE spot ETF in January this year.
Additionally, Galaxy Digital's associated wallet purchased approximately $8.8 million worth of HYPE within the last 2 hours; insider whale agent Garrett Jin also deposited 10 million USDC into Hyperliquid to directly buy HYPE.
Bitwise Chief Investment Officer Matt Hougan recently characterized HYPE as one of the most mispriced assets in the current crypto market. He believes the market is still pricing HYPE within the framework of perpetual contract DEX tokens, while Hyperliquid’s actual scale has far surpassed this framework—nearly half of its trading volume is now tied to non-crypto assets, including commodities, stock indices, RWA, and prediction markets.
This assessment is supported by the actual revenue generated by the Hyperliquid protocol itself. The platform channels 97% of its fee income into the Assistance Fund, continuously buying back and burning HYPE on the open market, with cumulative repurchases exceeding $2.49 billion since 2025, accounting for 46% of the industry's total buybacks.
On-chain data shows that Hyperliquid recently accounted for over 42% of total blockchain transaction fee revenue.
Revenue sources are also continuously expanding. Following Coinbase’s collaboration with Circle as the USDC treasury capital deployment partner and the activation of the AQAv2 upgrade, USDC reserve earnings are expected to add approximately $440,000 in daily buyback potential to the protocol.
In the RWA space, after the launch of HIP-3, trading volumes for perpetual contracts on commodities such as oil, gold, and silver have continued to surge, with crude oil perpetual contracts reaching a single-day trading peak of over $2.2 billion during the Iran conflict.
Hyperliquid's RWA perpetual open interest has reached a new all-time high of $2.6 billion, doubling since two months ago. The platform has reached 1.2 million total users and $4.33 trillion in total trading volume, accounting for approximately 70% of the on-chain perpetual DEX market.
In the HIP-4 prediction markets, Hyperliquid officially launched its prediction market feature in May this year, with the daily trading volume of its first binary contract on BTC price direction reaching approximately three times the combined volume of similar markets on Polymarket and Kalshi. ChainCatcher provided a detailed analysis in“Can Hyperliquid Win in the Prediction Market?”.
Polymarket's latest data shows that the market assigns an 80% probability to HYPE reaching $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 predicted that HYPE could reach $150 before August; today, he posted again on social media stating that HYPE is getting closer to its all-time high.
Hayes’s Maelstrom fund has previously sold positions in ENA, PENDLE, and ETHFI, and has increased its stake in HYPE. According to HyperInsight, Arthur Hayes currently holds 247,334 HYPE tokens, valued at $14.5 million, with unrealized profits exceeding $6.5 million.
However, Hyperliquid's rapid expansion has also attracted trouble. In particular, after the launch of HIP-3, on-chain commodity contract trading volume quickly eroded traditional exchanges' weekend and after-hours trading, directly encroaching on Wall Street's interests.
Recently, CME and ICE have jointly pressured the U.S. CFTC to require Hyperliquid to register and comply with regulation, arguing that its anonymous, 24/7 trading environment may distort global oil price benchmarks.
Meanwhile, according to on-chain monitoring by Hyperinsight, two addresses marked as major market makers on Hyperliquid withdrew nearly 90% of the BTC and ETH liquidity during the same period, with an estimated total withdrawal of nearly $100 million. ChainCatcher provides a detailed analysis of this context in “Hyperliquid Disrupts Wall Street: Regulators Unsettled, Market Makers Flee?”.
With the token price surging, HYPE has gained over 125% this year, and its FDV once surpassed SOL, making the operational risk impossible to ignore. On-chain monitoring shows that large holders have established hundreds of millions of dollars in short positions to hedge against their substantial HYPE spot holdings.
Regulatory uncertainty has not yet dissipated, and the CFTC’s stance toward Hyperliquid remains a variable hanging overhead. Beyond the long-short battle, this struggle over the boundaries of on-chain finance is far from over.