HYPE reaches new highs—is the 'HYPE version of MicroStrategy' $PURR worth buying?
- Core Thesis: Hyperliquid Strategies (PURR) is a "DAT" company with no real business operations, solely operating by holding and staking HYPE tokens. Its stock value is entirely dependent on the price performance of HYPE. Although it has recently garnered attention due to HYPE's surge and institutional involvement, the argument comparing its capital efficiency to that of MicroStrategy (Strategy) is misleading. For investors, PURR primarily serves as a compliant channel for traditional finance to gain exposure to HYPE, rather than being a superior investment vehicle.
- Key Elements:
- PURR's business model consists solely of buying, staking, and holding HYPE. It currently holds approximately 20 million HYPE and $113 million in cash, with no actual business operations, meaning its stock price is entirely dependent on HYPE's price.
- PURR was formerly a biotech company, restructured through a SPAC merger and acquisition led by institutions like Paradigm and Atlas Merchant Capital. Its management team largely consists of seasoned traditional finance professionals, including a former CEO of Barclays and a former COO of the New York Stock Exchange.
- HYPE has surged over 150% year-to-date, rising from around $25 to over $62, making it one of the strongest crypto assets in 2025 and directly driving PURR's gains exceeding 100%.
- Institutions like Goldman Sachs, 21Shares, and Bitwise have recently disclosed holdings of PURR shares or launched HYPE spot ETFs. Coupled with Cantor Fitzgerald raising its price target, these form positive market catalysts.
- The comparison claiming "capital efficiency surpassing MicroStrategy" is misleading: PURR's cost basis for its HYPE holdings is around $7 (a nearly 9x increase), whereas MicroStrategy's cost basis for BTC is approximately $75,000 (barely any appreciation). The return difference stems from the performance of the underlying asset, not managerial skill.
- PURR currently trades at a discount of approximately 11%-23% relative to its coin holdings (mNAV). However, this could turn into a premium when accounting for newly issued shares. Dilution risk, incomplete pass-through of returns, trading time restrictions, and counterparty risk are key disadvantages compared to directly holding the coin.
- For investors capable of directly purchasing HYPE, PURR's equity wrapper introduces additional costs (such as dilution, taxation, and trading friction) without providing excess returns. Its core value lies solely in offering a compliant channel for traditional accounts (e.g., IRAs) that are restricted from directly holding the asset.
Author: TechFlow
On May 24, a tweet about Hyperliquid Strategies (NASDAQ: PURR) sparked considerable discussion in English CT:
The company used approximately $220 million to buy HYPE, and currently holds an unrealized profit of nearly $1 billion, even surpassing the profitability efficiency of Michael Saylor's Strategy (formerly MicroStrategy) on BTC.
This topic is now gradually spreading to the Chinese-speaking community. HYPE recently hit a new all-time high above $62, with a year-to-date gain of over 150%, making it one of the best-performing major crypto assets this year.
As the only publicly traded proxy for HYPE in the US stock market, PURR has also surged over 100% year-to-date, naturally becoming a FOMO target in US equity research.
However, before following the trend, several questions need to be clarified:
1. What exactly is this company?
2. How does it differ from buying HYPE directly?
3. Does the claim of "capital efficiency surpassing MicroStrategy" hold up under scrutiny?
$PURR, Pure DAT
First, the conclusion: PURR is not a company with actual business operations; it is essentially a pure $HYPE stock wrapper.
Its business model can be summed up in one sentence: Buy HYPE, stake HYPE, hold HYPE. As of April 2026, public information shows the company holds approximately 20 million HYPE, along with about $113 million in cash, and zero debt.
This means the entire value of the stock depends on one thing: the price of HYPE.
Since there is no business to analyze, evaluating such a company boils down to two dimensions: the underlying asset itself, and who is operating this shell.
The latter determines capital operation capabilities, such as when to issue more shares to buy coins, when to conduct buybacks to support the price, how to manage the premium or discount between the stock price and net asset value... It also determines whether institutional capital is willing to enter through this vehicle.
Historically, PURR was formerly Sonnet BioTherapeutics, a small biotech company listed on Nasdaq. In July 2025, it announced a merger with Rorschach I, and the transaction was completed in December of the same year, with an overall valuation of $888 million. It was renamed Hyperliquid Strategies with the ticker PURR.
Notably, the initiators of this transaction were Paradigm and Atlas Merchant Capital.
Paradigm is one of the top venture capital firms in the crypto industry, having backed projects like Uniswap, Blur, and Friend.tech. It has deep ties in the Hyperliquid ecosystem and directly participated in forming this SPAC.
Atlas Merchant Capital is a financial services investment firm based in New York and London. Its two founders hold key positions at PURR: Chairman Bob Diamond is the former CEO of Barclays, and CEO David Schamis is a former partner at JC Flowers.
The board also includes former Boston Fed President Eric Rosengren and former NYSE COO Larry Leibowitz. Other participants include Galaxy, D1, and Pantera, all top-tier institutions in the crypto and macro space.
Most DAT companies have management teams from the crypto-native circle, while PURR is almost entirely composed of traditional finance veterans.
$HYPE Strong, $PURR Soars
PURR caught the attention of the Chinese-speaking community primarily due to HYPE's own strength.
HYPE surged from around $25 at the beginning of the year to a new all-time high above $62 in May, achieving a year-to-date gain of over 150%. Against the backdrop of a consolidating BTC and lackluster performance from ETH and SOL this year, HYPE stands out as the most impressive major crypto asset.
Our previous article has already analyzed Hyperliquid's fundamental flywheel: a ~70% market share in the perp DEX space, weekly fee revenue exceeding $10 million, and 97% of protocol fees used to buy back and burn HYPE. This flywheel is still accelerating.
(Reference: "Market Observation: From HYPE to ZEC, Grasping the 4 Narrative Lines Behind Recent Altcoin Heat")
As HYPE rises, PURR naturally follows suit.
As the only publicly traded proxy for HYPE in the US stock market, PURR has surged over 100% year-to-date, climbing from the $3 range to a recent high of $8.79.
For investors who only have US stock accounts and no direct exposure to the crypto market, PURR is almost the only option to gain HYPE exposure. However, what transformed PURR from a "niche asset" into a "social media topic" was the clustering of several institutional signals since May.
Goldman Sachs disclosed in its Q1 13F filing that it bought approximately 650,000 shares of PURR. While the amount is modest (around $3.3 million), the name Goldman Sachs itself serves as an endorsement. Around the same time, 21Shares' and Bitwise's HYPE spot ETFs were listed on Nasdaq and NYSE, and Cantor Fitzgerald raised its price target for PURR from $6 to $8.
These events, occurring during the window of HYPE's new highs, propelled PURR into the spotlight for a broader audience.
Then came the tweet mentioned at the beginning of the article: PURR used $220 million in principal to buy HYPE, and now holds an unrealized profit of nearly $1 billion. In the short term, its capital efficiency certainly surpasses MicroStrategy's.
With such a significant surge, it naturally attracts a lot of attention. However, if you are considering trading this stock, caution is warranted.
The Most Capital Efficient DAT? Really?
Strategy (formerly MicroStrategy) has invested over $60 billion to buy BTC, with an average cost of about $75,000. PURR only used about $220 million to buy HYPE, yet its unrealized profit is close to or even surpasses that of Strategy. Does this mean PURR's "capital efficiency" is far higher than MicroStrategy's?
This comparison is numerically correct but logically misleading.
PURR's early HYPE holdings have an average cost of about $7. At the current price of $62, this represents a gain of nearly 9x. Strategy's average BTC cost is about $75,000, and BTC is currently trading around that level, showing almost no gain.
Therefore, PURR's higher unrealized profit is not due to any smarter actions by the company, but simply because the magnitude of the underlying asset's price increase is entirely different on a different scale. Anyone who directly bought HYPE spot with the same amount of money at the same time would have achieved the same return rate, without bearing the risk of equity dilution.
In other words, this is a victory of "choosing the right coin." If PURR had been established six months later and entered the market when HYPE was at $40, this "capital efficiency" narrative would completely fall apart.
For US stock investors who are only now paying attention to PURR, the more practical question is: Are you buying PURR at a premium or a discount relative to the value of HYPE the company holds?
This brings us to the core valuation metric for DAT companies – mNAV (modified Net Asset Value per share).
We pulled data from PURR's official dashboard and SEC filings to perform a quick mNAV calculation.
The company currently holds 20.8 million HYPE (worth approximately $1.296 billion at the current price), plus $114 million in cash. After deducting deferred tax liabilities and other liabilities, the net asset value is approximately $1.34 billion.
Looking at just the 134.6 million shares outstanding, the NAV per share is about $9.98. With the current stock price at $7.67, this represents a discount of about 23%. If we include the approximately 29.8 million outstanding warrants, the fully diluted share count becomes about 155 million, resulting in a NAV per share of about $8.66, a discount of about 11%. However, the company just registered 35.16 million new shares for issuance. If all of these are executed, the share count expands to about 190 million, dropping the NAV per share to $7.07, meaning the stock price would be at a slight premium of 1.08x.
Therefore, whether PURR is "cheap" or "expensive" depends on your view of future dilution.
Share issuance itself is not necessarily a bad thing. If management issues shares during a high premium period and uses the proceeds to buy more HYPE, the amount of HYPE per share could actually increase. However, if issuance continues when market sentiment cools and the stock price falls below NAV, it dilutes existing shareholders.
This company has only existed for half a year and hasn't been through a complete downward cycle. There is no historical record to reference for how management would operate under extreme conditions.
Another point to note: the deferred tax liability used in the above calculation is $60.5 million, based on the Q3 earnings report as of March 31. However, HYPE has risen significantly since the end of March. The tax liability corresponding to the unrealized gains has likely increased further, meaning the actual NAV might be slightly lower than our calculation.
Buying PURR vs. Buying HYPE Directly: What's the Difference?
This is the most practical question. Since PURR's entire value derives from HYPE, why not skip the middle layer and buy HYPE directly?
The answer is simple: for some investors, they can't buy it directly. US retirement accounts (IRAs, 401ks), traditional brokerage accounts, and some institutional funds with strict compliance requirements cannot directly hold crypto assets.
Furthermore, the Hyperliquid platform's front-end explicitly restricts use by US residents.
Therefore, PURR provides a Nasdaq-listed stock wrapper, allowing these funds to gain HYPE exposure through standard stock trading. The shell built by Paradigm essentially sells this compliant channel.
If you belong to this category of investors, PURR is indeed currently the almost only option. Although 21Shares' and Bitwise's HYPE spot ETFs were listed in mid-May, these products have been on the market for an extremely short time, and their liquidity and tracking error remain to be seen.
However, if you have the capability to buy HYPE directly, then PURR's stock wrapper becomes a pure friction cost with a negative effect; it should not be considered as adding Beta returns to HYPE.
This cost manifests on several levels:
First, dilution risk. If you hold HYPE directly, your share cannot be diluted by others. But holding PURR stock means the company can issue new shares at any time to buy more HYPE.
Second, incomplete return transmission. Holding HYPE directly allows you to stake it and earn staking rewards. Future airdrops and ecosystem incentives also go directly to you. By holding through PURR, the staking yield first goes into the company's account. After deducting operational expenses and taxes, it is only indirectly reflected in the net asset value per share.
Third, trading time and pricing friction. HYPE trades 24/7, while PURR only trades during US stock market hours. If HYPE experiences significant volatility over the weekend or after hours, PURR holders can only react when the market opens.
Fourth, counterparty risk. SEC filings disclose that all of PURR's HYPE holdings are stored with a single custodian. By holding PURR, the safety of your assets depends on this custodian's performance and the company's operational continuity.
The author's assessment is that PURR is more of a "channel product" than an "investment product." Its value lies purely in opening a channel from traditional financial accounts to HYPE. If you don't need this channel, every additional risk introduced by the middle layer is unnecessary.
Therefore, for crypto and US stock investors in the Chinese-speaking community, the conclusion is quite direct:
The judgment you need to make is whether you are bullish on HYPE, not whether you are bullish on the PURR shell.
