Why is HYPE still surging? Has it peaked?

Original by Odaily (@OdailyChina)

Author: Asher (@Asher_0210)

In the current crypto market conditions, if there is one altcoin that can excite the market, it is probably HYPE.

Market data shows that HYPE's exchange rates against BTC and BNB have hit new all-time highs, with HYPE/BTC currently at 0.0006249 and HYPE/BNB at 0.075. This means that HYPE’s strength is not merely following a market rebound, but is consistently outperforming major crypto assets like BTC and BNB.

In the past, the external perception of Hyperliquid was largely limited to a high-performance Perp DEX. But now, capital is clearly not just buying a decentralized trading platform token; rather, it is betting that Hyperliquid can integrate more asset types, more liquidity, and more trading scenarios into the same on-chain trading system.

HYPE’s price performance is also a reflection of the market re-evaluating Hyperliquid's value.

In this article, Odaily will break down the logic behind its rise from several key changes.

From THYP to BHYP: Unlocking Compliant Buying Pressure for HYPE

The first external catalyst for HYPE’s recent rise is the opening of the ETF channel.

Currently, two asset management institutions have launched ETF products centered around Hyperliquid. On May 12, 21Shares listed the Hyperliquid ETF under the ticker THYP. On May 15, Bitwise listed the Hyperliquid ETF under the ticker BHYP. Data shows that as of May 18 EST, 21Shares Hyperliquid ETF THYP has seen total net inflows of $12.901 million; Bitwise Hyperliquid ETF BHYP has seen total net inflows of $2.0446 million.

More critically, Bitwise did not stop at simply issuing an ETF. Yesterday, Bitwise announced it would allocate 10% of the management fee income from its BHYP Hyperliquid ETF to hold HYPE on its corporate balance sheet, and that these HYPE holdings will also be staked.

This transforms the ETF narrative from a simple product launch into a source of potential sustained buying pressure. As the ETF scale grows, management fee income increases, theoretically allowing Bitwise to increase its HYPE holdings correspondingly. In the short term, this capital may not immediately sway the price; however, in the long term, it links ETF growth, asset manager revenue, and HYPE holdings together.

In other words, the ETF brings not just a one-off wave of hype to HYPE, but a new channel for capital inflow. HYPE is beginning to transition from a purely crypto-native asset to a token of an on-chain trading platform whose price can be influenced by traditional capital.

USDC Returns to Hyperliquid, Bringing Over $400,000 in Potential Daily Buying Pressure for HYPE

The second reason for HYPE’s recent rise is that with USDC returning to Hyperliquid, the market has started to re-evaluate the protocol’s future stable income stream and whether this income can continue to flow into HYPE buybacks.

According to an official announcement from Hyperliquid, Coinbase will act as a capital deployer, and Circle is responsible for deploying CCTP and native cross-chain infrastructure. Both parties have committed to staking HYPE to activate AQAv2. This means that the return of USDC is not just a routine stablecoin integration but a new mechanism established by Coinbase, Circle, and Hyperliquid around native USDC, cross-chain liquidity, and reserve yield distribution.

The key point is that Coinbase will subsequently share most of the USDC reserve yield with the Hyperliquid protocol. While the exact revenue-sharing ratio has not been officially announced, if we refer to the previous income distribution mechanism of USDH, Hyperliquid could potentially receive approximately 90% of the reserve yield. Therefore, the market is also interpreting AQAv2 as a protocol-level revenue-sharing mechanism established by Hyperliquid for USDC reserve yield.

Based on community estimates, with a scale of $4.7 billion and an annualized yield of 3.8%, the USDC reserve yield would correspond to approximately $160 million in annualized income, translating to roughly $440,000 worth of daily HYPE buyback pressure. Once the AQAv2 interface is fully developed and operational, Hyperliquid will no longer rely solely on trading fees for HYPE buybacks but may have a relatively stable source of cash flow.

This is where the return of USDC truly impacts HYPE's pricing. Previously, HYPE's buyback strength was primarily dependent on trading volume – the more active the trading, the stronger the protocol's revenue and buyback capacity. However, with the addition of USDC reserve yield, the source of HYPE's buying pressure is no longer just trading fees; it also depends on how much stablecoin capital Hyperliquid can attract and retain. In other words, trading fee buybacks represent platform trading activity, while USDC reserve yield buybacks represent the platform's capital retention capability. The market's re-pricing of HYPE might precisely be due to the observation that HYPE's buyback narrative no longer relies solely on trading heat.

Hyperliquid Integrates HIP-4, Also Vying for a Share of the Prediction Market Business

Beyond RWA, Hyperliquid has also set its sights on one of the hottest tracks in the crypto space this year – prediction markets.

On May 2, Hyperliquid launched HIP-4 Outcome Markets on its mainnet, initially introducing BTC daily binary outcome contracts. Simply put, users can trade on whether the price of BTC will be above a specified price at a certain point in time. The contract price fluctuates between 0.001 and 0.999, representing the market's implied probability of the event occurring. Upon resolution, the contract settles at 1 if the event occurs, and 0 if it does not.

Data from Predictefy shows that on the launch day of HIP-4, the trading volume for BTC price-related event contracts reached $6.15 million, and within this specific niche, Hyperliquid's volume has already far surpassed comparable markets on Kalshi, Polymarket, and other prediction platforms.

For HYPE, the significance of HIP-4 extends beyond adding another product feature. It connects prediction markets to HYPE's staking, fees, and buyback mechanisms. According to the design, when permissionlessly deploying prediction events in the future, market creators will need to stake 1 million HYPE, which is higher than the 500,000 HYPE required for deploying perpetual markets under HIP-3. Each staking seat can support rolling and cyclical markets and can be reused after settlement. However, staked assets may be slashed in cases of oracle manipulation, abnormal market states, or prolonged downtime.

Therefore, HIP-4 brings more than just a conceptual boost from prediction markets to HYPE; it provides a more direct path for value capture. More permissionless prediction event deployments mean more demand for HYPE staking, and higher trading volume means more fee income, which ultimately feeds back into Hyperliquid's existing buyback logic.

RWA Open Interest Hits New Highs, Hyperliquid's Ceiling Extends Beyond Perp DEX

In addition to ETF inflows and USDC yield returns, RWA is further pushing the boundaries of Hyperliquid's trading ecosystem.

Data indicates that the open interest for RWA trading on the Hyperliquid platform has surged to $2.6 billion, hitting a new all-time high and doubling from two months ago. This data point shows that Hyperliquid is no longer just handling trading demand for crypto assets like BTC, ETH, and SOL; real-world assets are also starting to form a significant scale within its on-chain trading system.

This is crucial for HYPE's valuation. If Hyperliquid were merely a Perp DEX, the market's valuation anchor would primarily be the crypto cycle, trading volume, and fee revenue. However, RWA opens up another dimension. Stocks, commodities, precious metals, pre-IPO assets, and more could all become objects of 24/7 on-chain trading.

The significance of RWA for Hyperliquid is not just about adding more trading pairs; it lifts the platform out of internal competition within the crypto market. Perp DEXs compete over who can capture more crypto trading volume, but RWA is about who can bring the trading demand of off-chain assets onto the chain. If Hyperliquid can continue to grow this segment, HYPE's pricing will no longer just follow crypto market cycles but will begin to be tied to the larger trading demand for real-world assets.

US SEC Plans to Introduce Exemption for Tokenized Stocks, Adding Impetus to the RWA Narrative

Potential regulatory easing by the US SEC regarding tokenized stocks is also raising Hyperliquid's long-term ceiling. Reports suggest that the US SEC is preparing to introduce an innovation exemption for tokenized stock trading, allowing tokens linked to the stocks of publicly traded companies to be traded on crypto platforms. In some cases, the relevant platforms may not need to obtain full broker-dealer or exchange registration, and third-party issued tokenized stocks might not even require the consent of the listed company.

For Hyperliquid, this doesn't mean starting from scratch with tokenized stocks; instead, it adds regulatory imagination to the RWA direction it is already pursuing. On the Hyperliquid platform, trading of real-world assets like stocks and pre-IPO assets has already begun to scale, and RWA open interest has hit new highs. If US regulators truly open a testing window for tokenized stocks, the demand for such on-chain trading could be further amplified.

For Hyperliquid, the clearer the regulatory boundaries, the lower the friction for on-chain trading of real-world assets. The entity best positioned to capture this incremental growth is often not a single asset issuer but the platform that hosts the order book, liquidity, and settlement. If tokenized stocks transition from a gray experimental phase to a compliant growth driver, Hyperliquid's already-running RWA business will not just be an early experiment but could become the main battleground for the next phase of on-chain trading competition.

Fundamentals Are Still Strengthening, But Short-Term Enters a Zone of Long-Short Struggle

HYPE's upward logic is becoming clearer. ETFs have opened the door for compliant capital inflows, the return of USDC brings potential buyback increments, and RWA, prediction markets, and tokenized stocks continue to broaden Hyperliquid's trading boundaries. All these changes point in the same direction – Hyperliquid is no longer just a Perp DEX but is expanding into a larger on-chain trading system.

However, a valid long-term thesis does not guarantee a one-way price increase in the short term. According to on-chain data, HYPE is currently witnessing a large-scale confrontation between major long and short whales, with the top 1 and top 2 whale positions serving as counterparts, totaling over $60 million. Longs are betting on Hyperliquid's future growth potential, while shorts are betting on a pullback after rapid short-term gains. As whale positions enlarge, HYPE's short-term price may be influenced not just by fundamentals but also by leverage liquidations, funding rates, and market sentiment.

Therefore, predicting HYPE's short-term price trajectory is difficult; it largely depends on which side of the long-short battle is forced to capitulate first. However, over a longer timeframe, HYPE's fundamentals remain compelling. Hyperliquid continues to expand its trading assets, capital channels, and revenue sources, and HYPE is playing an increasingly central role as a value carrier through buybacks, staking, and fee capture.

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