Author: Zhou, ChainCatcher

On May 21, HYPE broke through $59, reaching a new high since September 2025, with a 24-hour increase of over 20% and a market value of nearly $15 billion, ranking first globally.

According to Santiment analysis, short squeeze and ETF fund inflow are the direct triggers for this wave of market movement.

In the past few days, many traders bet on HYPE's decline, causing significant negative funding rates to soar across trading platforms. After the price continued to rise, bearish traders were forced to buy back their positions, further pushing up the price. Currently, the open positions for HYPE still maintain a high level over $1.92 billion, with new traders continuously entering the market, and the position size remaining stable.

Meanwhile, ETF channels simultaneously amplified capital inflow. According to SoSoValue data, the two American spot ETFs tracking Hyperliquid (21Shares' THYP and Bitwise's BHYP) recorded a total net inflow of about $22.3 million in their first week, with over $25.46 million net inflow recorded yesterday.

Analysts noted that in the first six trading days, the two Hyperliquid ETFs had three days where the net inflow adjusted for market cap outperformed Bitcoin ETFs and five days where it outperformed Ethereum ETFs. Among them, Bitwise announced that 10% of the management fee for BHYP will be used to continuously buy and stake HYPE on the company's balance sheet.

It’s worth noting that in the past three days, a16z, Goldman Sachs, Grayscale, and Galaxy Digital have all acted almost simultaneously, and the largest external holding organization of HYPE has quietly completed a transfer.

According to on-chain analyst Ai Yi's monitoring, a16z has initiated a large-scale accumulation model since August 2025, continuously accelerating this year. Currently, it has accumulated 9.18 million HYPE, valued at about $356 million, with an average price of $38.77, and the holdings are dispersed across dozens of addresses, most of which are in a staked state, making it the largest external holding institution of HYPE, surpassing Paradigm, which previously held this position for a long time.

In the past 24 hours, a16z has withdrawn 2,597,000 HYPE from major exchanges, with an average price of $51.17, showing a paper profit of over $79 million, and it has not yet stopped its accumulation.

Other institutions are also active. Goldman Sachs recently sold over $152 million in XRP, $500 million in ETH, and $450 million in BTC, then shifted to buying HYPE; Grayscale-associated addresses purchased and staked about $24.95 million in HYPE in the past week and added approximately $12.1 million in the last 17 hours, having submitted an S-1 registration application for a HYPE spot ETF in January this year.

Additionally, Galaxy Digital's associated wallet bought about $8.8 million in HYPE in the last two hours; Garrett Jin, the agent for insider whale 1011, also deposited $10 million in USDC directly to buy HYPE.

Bitwise's Chief Investment Officer Matt Hougan recently described HYPE as one of the "most mispriced" assets in the current cryptocurrency market. He believes the market is still pricing HYPE based on the framework of perpetual contract DEX tokens, while Hyperliquid's actual scale far exceeds this framework, with nearly half of the platform's trading volume now related to non-cryptocurrency assets, covering various classes of assets like commodities, stock indices, RWA, and even prediction markets.

Supporting this judgment is the real income generated by the Hyperliquid protocol itself. The platform channels 97% of its fee income into the Assistance Fund, continuously buying and destroying HYPE in the open market. Since 2025, it has repurchased over $2.49 billion, accounting for 46% of the total buyback in the industry.

On-chain data shows that Hyperliquid recently occupied more than 42% of the total blockchain fee revenue across the network.

The sources of revenue are also continuously expanding. After Coinbase collaborated with Circle as the USDC treasury capital deployer and activated the AQAv2 upgrade, it is expected that USDC reserve earnings will add about $440,000 in buyback potential daily for the protocol.

Regarding RWA, after the launch of HIP-3, the transaction volume of perpetual contracts for commodities like oil, gold, and silver has surged, with the daily transaction peak of crude oil perpetual contracts exceeding $2.2 billion during the Iranian conflict.

Currently, the perpetual open contracts for RWA on the Hyperliquid platform have reached a historical high of $2.6 billion, doubling from two months ago. The total number of users has reached 1.2 million, with a total trading volume of $4.33 trillion, accounting for approximately 70% of the on-chain perpetual DEX market share.

In the area of HIP-4 prediction markets, Hyperliquid officially launched its prediction market function in May this year, with daily trading volume of the first binary contract for BTC price direction approximately three times that of the total in similar markets like Polymarket and Kalshi. ChainCatcher has detailed analysis in"Can Hyperliquid Win in the Prediction Market?".

Polymarket's latest data shows that the market bets that HYPE has an 80% probability of 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 called that HYPE is expected to reach $150 before August, and today he reiterated on social media that HYPE is getting closer to reaching a historical high.

Hayes' Maelstrom fund has previously sold ENA, PENDLE, ETHFI, and other holdings to increase their investment in HYPE. According to HyperInsight monitoring, Arthur Hayes currently holds 247,334 HYPE, valued at $14.5 million, with a paper 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 has rapidly encroached on traditional exchanges' weekend and after-hours trading, directly treading on Wall Street's interests.

Recently, CME and ICE have teamed up to pressure the US CFTC, demanding that Hyperliquid register and accept regulation, believing that its anonymous, year-round trading environment could distort global oil price benchmarks.

Meanwhile, according to Hyperinsight on-chain monitoring, two addresses marked as mainstream market makers on Hyperliquid withdrew nearly 90% of BTC and ETH liquidity during the same timeframe, estimating a total withdrawal of nearly $100 million. ChainCatcher has detailed analysis on this background in"Hyperliquid Disturbing Wall Street's Market, Is Regulation Uncertain While Market Makers Flee?".

As the cryptocurrency price continues to rise, HYPE has achieved an increase of over 125% this year,FDV at one point surpassed SOL,the operational risks can no longer be ignored. According to on-chain monitoring, there are already large holders who, while holding a significant amount of HYPE spot positions, have established over a hundred million dollars in short positions to hedge.

The uncertainty at the regulatory level has not dissipated, and the CFTC's attitude toward Hyperliquid remains a variable hanging over. Beyond the long and short battle, this game regarding the boundaries of on-chain finance has also not ended.