HYPE Surges 26.86%, Approaching New Highs—What Is the Market Buying?

Original｜Odaily Planet Daily (@OdailyChina)

Author｜Wenser (@wenser 2010 )

Overnight, the entire crypto market turned bullish again, and HYPE emerged as one of the standout performers.

As of the time of writing, HYPE is trading at $73.9, up 26.86% in the past 24 hours, less than $3 away from its all-time high of around $76.5, ending a nearly two-month downtrend of consolidation and decline.

As for the catalysts behind this move, aside from factors we previously covered in articles such as "From Hedge Funds to Family Offices: Who Is Quietly Building HYPE Exposure Through PURR?" and "On the Eve of HYPE's Breakout: AQAv2 Begins Fee Accrual This Month, HIP-4 Poised for Launch"—such as Wall Street entering the space and Hyperliquid ecosystem growth—the most direct catalyst is the news that Trump personally mentioned at a White House meeting last night: "The U.S. CFTC Chairman is pushing for Hyperliquid to enter the U.S. in a fully compliant and legal manner." Combined with the earlier news that the "Hyperliquid Policy Center and trade.xyz jointly proposed that the U.S. SEC introduce pre-IPO perpetual contracts," Hyperliquid's path to entering the U.S. market in a compliant manner may be faster than the market expects.

A battle over "compliant on-chain Perp DEXs in the U.S." and "pre-market pricing power for U.S. stocks" has quietly begun, and Hyperliquid is the "industry's best mover."

Hyperliquid Becomes a Top Candidate for Compliant On-Chain Trading Platforms in the U.S.: Trump's Personal Endorsement and the CFTC Chairman's Active Push

For Hyperliquid and HYPE, the most immediate tailwind is naturally Trump's public endorsement.

With the midterm elections drawing closer, Trump has launched a new round of political campaigning and promotional efforts, and the crypto industry has once again become his best proof of "Make America Great Again." Most notably, he views various regulatory improvements in the crypto sector as key initiatives to "encourage innovation and compete for dominance in finance, crypto, and technology."

As an on-chain trading platform currently drawing close attention from both traditional finance and the crypto market, Hyperliquid's industry position and liquidity scale undoubtedly make it the best case study. Hyperliquid, for its part, has not been waiting for a free lunch—it has already begun actively lobbying and proactively advancing its compliant entry into the U.S. market.

Hyperliquid Policy Center and trade.xyz Actively Lobby the U.S. SEC: Opening the Regulatory Door for Pre-Market Contracts

On August 18, the Hyperliquid Policy Center and trade.xyz jointly released a comment letter to the U.S. SEC, proposing to include IPO pre-market perpetual contracts (IPOP) within the IPO modernization reform framework, allowing investors to trade price exposure to a company's stock via perpetual contracts before its official listing, while forming a public and continuous market pricing mechanism.

The so-called "IPOP" does not represent company shares, nor does it grant holders voting rights or other shareholder rights—it merely provides price exposure and will cease its pre-IPO function once the relevant company officially goes public.

trade.xyz stated that it has already launched 5 IPOP markets on Hyperliquid, including Cerebras, SpaceX, SK Hynix, and ChangXin Memory (CXMT), and that the pre-listing prices formed in these markets have, in some cases, been relatively close to the opening prices after the stocks were listed, providing issuers and underwriters with an additional public price discovery signal.

The two parties also recommended that the U.S. SEC and the U.S. CFTC clarify the regulatory classification of equity-linked perpetual contracts and establish rules for information disclosure, listing eligibility, market manipulation prevention, and leverage and position limits, with the ultimate goal of allowing U.S. investors, including retail participants, to access the IPO pre-market perpetual contract market.

Earlier, in March of this year, S&P Dow Jones Indices officially authorized trade.xyz to launch on-chain perpetual contracts based on the S&P 500 for eligible non-U.S. investors. On May 26 of this year, U.S. SEC Chairman Paul Atkins initiated Proposal CLL-16, inviting market discussion on reforms to IPOs, direct listings, and other listing methods.

On July 14, the Hyperliquid Policy Center, trade.xyz, and Sullivan & Cromwell formally met with the SEC's Crypto Task Force regulatory working group to introduce the Hyperliquid protocol, technology, and the HIP-3 market.

In the race for pre-market pricing power in U.S. equities, Hyperliquid ecosystem's track record and mature process systems provide ample evidence to support the above lobbying efforts and its ability to deliver reliable price discovery mechanisms to the market going forward.

Just as Robinhood's CEO and Uniswap's founder have both mentioned "tokenization reshaping the global financial industry," regardless of how traditional finance views it, transforming traditional financial assets with on-chain trading platforms has become a reality. The only difference lies in whether regulators will proactively step in to clarify boundaries and management rules. This is a true historical trend.

U.S. CFTC Chairman Becomes the Key Force Pushing Hyperliquid's Compliant Entry into the U.S.: Hyperliquid's "Invisible Connections in Washington"?

Beyond proactive lobbying, Hyperliquid's other major "ally" is Michael Selig, the current CFTC Chairman whom Trump mentioned as responsible for advancing Hyperliquid's compliant entry into the U.S.

On August 14, Michael Selig pre-announced that the CFTC's inaugural Innovation Advisory Committee meeting would be held on August 20 in Washington, focusing on topics such as crypto asset regulation, artificial intelligence, and prediction markets, and would be live-streamed on the CFTC's official website.

This morning, at the White House crypto meeting, he again stated regarding the CFTC Innovation Advisory Committee's first meeting scheduled for tomorrow that tomorrow he will share more details on the future regulatory path—a path that will provide greater certainty for innovators while boosting market confidence over the coming decades.

Selig added: "Innovation depends on regulatory clarity. Clear rules bring confidence, confidence attracts investment, investment creates jobs, strengthens our markets, and keeps the world's top talent building here in the United States."

Previously, the development of derivatives contract trading on platforms such as Kalshi and Coinbase was also carried out under the regulatory approval of the U.S. CFTC and Selig. It is no exaggeration to say that Selig and U.S. SEC Chairman Paul Atkins can be called "the two vanguards of the Trump administration's crypto-friendly regulation," and they are particularly active in derivatives trading regulation.

Moreover, Selig has deep ties to Hyperliquid.

According to a revelation by Hyperliquid community member Dongdong Fuss: In May of last year, when Hyperliquid Labs submitted two comment letters to the U.S. CFTC regarding perpetual contract regulation, it was former CFTC Chairman Giancarlo who helped draft them as legal counsel. Giancarlo and Selig had a mentor-mentee relationship at the CFTC in their early years, and the two later worked together for three years at the Willkie law firm. In fact, Selig had only left that law firm two months before Hyperliquid Labs submitted its comment letters. Coincidentally, before Selig took office as CFTC Chairman, Giancarlo had publicly supported his "protégé" on multiple occasions.

In this way, Hyperliquid, leveraging the former CFTC Chairman's role as legal counsel, successfully connected with the current CFTC Chairman, and may now obtain the regulatory "ticket" for compliant entry into the U.S.

In response, Galaxy Research Head Alex Thorn also expressed keen interest, posting that he is very interested in the question of "how Hyperliquid will achieve compliance." Some in the comments speculated that it might adopt a HIP-3 whitelist approach or an operational model similar to platforms like Kalshi and Coinbase—for example, opening derivatives trading functionality after KYC. At this point, the specific operational path remains to be discussed.

Exploring the Feasible Paths for Hyperliquid's Compliant Entry into the U.S.: Clearing Partnerships, Asset Integration, and Building Anew

With the positive news out of the way, Odaily Planet Daily will now discuss the reference paths for Hyperliquid to truly enter the U.S. market in a compliant manner.

The first path, in terms of operational difficulty and market efficiency, is undoubtedly the more realistic option of "clearing layer entry partnerships + backend technical support."

In short, Hyperliquid can partner with licensed U.S. DCMs, FCMs, or clearing institutions, allowing them to connect to Hyperliquid's execution/clearing layer, with the partner handling KYC, customer protection, and reporting, while Hyperliquid primarily manages the on-chain processing flow aligned with settlement. This is also the path that Hyperliquid Policy Center CEO Jake Chervinsky has publicly expressed a preference for, rather than building a new U.S. trading platform from scratch.

The second path, from the perspective of product implementation and asset integration, involves "listed regulated trading platforms offering Hyperliquid platform assets."

In short, Hyperliquid platform assets and data would be integrated into already-approved trading platforms such as Coinbase, Kraken, and Kalshi, packaging on-chain assets into compliant trading platform assets—similar to adding a front-end entry point, transforming the Builder mechanism of HIP-3 and HIP-4 into "compliance partnerships."

The third path, from the perspective of profit sharing and brand maintenance, and also the most difficult and least efficient option, would be for Hyperliquid to acquire or rebuild a new compliant trading platform targeting the U.S. market. This is similar to Polymarket's acquisition of QCX. This would also mean that Hyperliquid would need to build KYC-compliant U.S. infrastructure or a full DCM from scratch, while sacrificing core advantages such as permissionlessness and self-custody.

It is worth noting that the U.S. CFTC cannot unilaterally circumvent core principles of domestic investment regulation (such as customer protection, anti-theft, and anti-money laundering) for Hyperliquid's sake, but it can reduce the compliance burden of the on-chain model by interpreting the core principles of the existing Commodity Exchange Act (CEA), adopting no-action strategies, or through rulemaking.

Based on available information, Hyperliquid still needs at least three to five months, or up to a year or even longer, of preparation before its compliant entry into the U.S. becomes a reality. But in any case, from the perspective of financial innovation and crypto regulation, "Hyperliquid's compliant entry into the U.S." has already entered a substantive promotion phase, and HYPE's price ceiling has consequently gained more momentum, with the potential to set a new all-time high once again.