HYPE reaches all-time high, faces $1.2B unlock on August 29

Article by Xiao Bing

On August 24, HYPE reached a historic high of $83.27 before pulling back to around $77.50. With a market capitalization of approximately $19.5 billion, it ranks among the top 15 crypto assets. Since the start of the year at $20, HYPE has nearly quadrupled in value over eight months.

Five days from now, on August 29, Hyperliquid will execute its largest single-month token unlock since the TGE in November 2024. According to Tokenomics.com, this unlock will release approximately 14.18 million HYPE tokens, representing 1.4% of the total supply, with a current value of about $1.2 billion—equivalent to 2.7% of HYPE’s circulating market cap.

Of this, 46.6% (approximately $560 million) is allocated to insiders (early investors and core contributors), 46.3% to the community (incentives, airdrops, etc.), and 7% to the Hyper Foundation. The next equal-sized unlock is scheduled for September 29, followed by monthly unlocks continuing through November 2029.

Can a token that has just reached a new all-time high absorb the continuous influx of massive supply?

First, correct a common misconception: token unlocking does not equal token selling.

A tracking report released by Tokenomist in April revealed a significant discrepancy between Hyperliquid’s actual unlock behavior and its theoretical schedule. As of March 2026, approximately 405 million HYPE tokens had been unlocked at the contract level, but only around 3.19 million had actually been claimed and entered circulation, representing a claim rate of just 0.79%. Over the five-month period from November 2025 to March 2026, the monthly claim rate peaked at no more than 17.6% (in the first month) and dropped as low as 1.4% (in February 2026).

This data indicates that Hyperliquid’s core contributors and early investors have hardly cashed out on a large scale, with the majority of unlocked tokens remaining unclaimed in the contract.

But whether this historical pattern can hold as HYPE approaches its all-time high is an entirely different question. The higher the price, the greater the incentive to cash out. Those who didn’t claim in the $20 to $60 range may make different decisions at $80.

Hyperliquid's most unique tokenomics mechanism is the Assistance Fund.

The fund uses 97% to 99% of protocol revenue to automatically purchase HYPE on open markets, executed daily without requiring governance votes or reliance on team discretion. In late 2025, the community voted to formally treat the tokens held by the fund as burned.

The scale of this buyback mechanism is unprecedented in the cryptocurrency industry.

As of July 2026, the Assistance Fund has accumulated approximately 45.7 million HYPE tokens. Annualized, the buyback intensity accounts for about 7% of the market cap—four to five times the Ethereum EIP-1559 burn rate and significantly higher than BNB’s quarterly burn volume. The protocol’s annualized fee revenue is approximately $1.3 billion, with monthly revenue ranging between $58 million and $80 million, and daily buyback amounts averaging $1.8 to $2 million. Since August 2025, the Hyperliquid network has generated approximately $800 million in net revenue, with HyperCore accounting for 95%.

Let’s do the math.

The tokens unlocking on August 29 are valued at approximately $1.2 billion. The Assistance Fund’s monthly average buyback amount is around $60 million to $80 million. If all unlocked tokens were immediately sold into the market, protocol buybacks could only absorb about 6% to 7% of them. The unlocked supply is roughly 15 times the buyback demand.

From a pure supply and demand perspective, this ratio is unfavorable for HYPE. Protocol buybacks cannot offset the selling pressure from full unlocking in the short term.

However, the assumption of a "full sell-off" is extremely unrealistic. Combined with a historical claim rate of 0.79% and past holding behavior, the actual sell volume entering the market is likely only a small fraction of the total unlocked amount. If actual selling pressure is limited to 5% to 10% of the unlocked amount (i.e., $60 million to $120 million), the protocol’s buyback mechanism would be capable of significantly offsetting or even fully absorbing it.

HYPE rose from approximately $54 at the end of July to $83 on August 24, increasing nearly 54% within a month, driven by several factors.

Protocol fundamentals remain strong: daily trading volume consistently stays between $6 billion and $8 billion, open interest is approximately $3.5 billion, and monthly fee revenue frequently exceeds that of Ethereum and Solana among crypto protocols. Bitwise’s HYPE ETF has become one of the world’s largest single-crypto-asset ETFs, bringing incremental institutional capital. Trump’s remarks at the White House crypto summit, combined with the CFTC’s efforts to facilitate Hyperliquid’s compliant entry into the U.S. market, have created an expected premium for HYPE’s U.S. market access.

These positive factors have already been fully priced in. The all-time high of $83 means the market has incorporated the most optimistic narrative into its valuation. With a $1.2 billion unlock occurring at this level, there is little room for additional positive surprises—and also little margin for error.

Hyperliquid's buyback mechanism is procyclical. Higher market activity → increased trading volume → higher fee revenue → accelerated buybacks → reduced token supply → higher prices →吸引更多交易者. This flywheel operates nearly perfectly during bull markets.

But the reverse is also true. If the market enters a prolonged downturn, trading volume shrinks, fee income declines, and the amount repurchased decreases accordingly. Meanwhile, tokens continue to unlock on a fixed monthly calendar schedule, so supply does not pause due to market conditions. Reduced buybacks + unchanged unlocks = net supply increase.

Hyperliquid has not yet been tested through a true long-term bear market. The brief pullback in February 2026 does not constitute a stress test. Whether HYPE’s buyback flywheel can maintain a price floor when reversing during a broader crypto market decline of more than 50% remains an unverified proposition.

The current circulating supply of HYPE is approximately 222 million tokens (22.2% of the total supply of 1 billion), with 48% still locked. Even before the unlock schedule is fully completed, the steady monthly increase in supply will continue to dilute existing holders. At the current unlock rate of about 14 million tokens per month and the existing circulating supply, monthly new supply represents approximately 6% of the current circulating amount. This is not a one-time "unlock event," but rather a prolonged supply expansion cycle spanning several years.

Whether protocol revenue can sustainably grow enough to offset this supply expansion through buybacks is the core variable in HYPE’s medium- to long-term valuation. Based on current data, buybacks cover only about 5% to 7% of the monthly unlock volume, leaving a significant distance from the deflationary threshold where buybacks exceed unlocks. Unless Hyperliquid’s trading volume and fee revenue increase by an order of magnitude, HYPE will remain a net inflationary token in the foreseeable future—buybacks can only slow the rate of inflation, not reverse it.

At its all-time high of $83, HYPE's bulls are betting on sustained volume growth, the realization of U.S. market access, and insiders continuing to hold after unlocks.

All three conditions must hold simultaneously for HYPE to absorb the supply shock; if any one condition weakens, the potential for drawdowns will be significantly amplified by increased supply.