Why is HYPE still surging? Has it peaked?

Original: Odaily ( @OdailyChina )

Author: Asher ( @Asher_0210 )

In the current crypto market, if there is one altcoin that can excite the market, it is likely 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 indicates 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, external perceptions of Hyperliquid have largely been limited to a high-performance Perp DEX. However, capital flows now suggest investors are betting not just on a decentralized trading platform token, but on Hyperliquid's ability to integrate more asset types, more liquidity, and more trading scenarios into a single on-chain trading system.

HYPE's price performance reflects the market's ongoing reassessment of Hyperliquid's value.

This article from Odaily will break down the bullish logic of HYPE's rise by examining several key changes.

From THYP to BHYP: HYPE's Compliant Buying Pressure is Opening Up

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

Two asset management institutions have launched ETF products centered around Hyperliquid. On May 12, 21Shares listed the Hyperliquid ETF with the ticker THYP. On May 15, Bitwise listed the Hyperliquid ETF with the ticker BHYP. Data shows that as of May 18 Eastern Time, 21Shares Hyperliquid ETF (THYP) had cumulative net inflows of $12.901 million; Bitwise Hyperliquid ETF (BHYP) had cumulative net inflows of $2.0446 million.

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

This transforms the ETF narrative from a simple product launch into a source of potential sustained buying pressure. The larger the ETF's scale, the higher the management fee income, and theoretically, the more funds Bitwise could allocate to accumulating HYPE. In the short term, this capital may not immediately dictate the price; but in the long term, it links ETF growth, asset manager revenue, and HYPE holdings.

In other words, the ETF doesn't just bring fleeting attention to HYPE; it provides a new capital channel. HYPE is evolving from a native crypto asset into an on-chain trading platform token that can be priced by traditional capital.

USDC Returns to Hyperliquid, Adding a Potential Daily 40+ Million Baht Buying Pressure for HYPE

The second reason for HYPE's recent rise is the market's reassessment of the protocol's future stable yield potential and whether this yield could flow back into HYPE buybacks following USDC's return to Hyperliquid.

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

The key point is that Coinbase will subsequently share a majority of the USDC reserve yield with the Hyperliquid protocol. Although the exact split ratio hasn't been officially announced, referencing the previous yield distribution mechanism for USDH, Hyperliquid could potentially receive approximately 90% of the reserve yield. Therefore, the market also interprets AQAv2 as a protocol-level revenue-sharing mechanism Hyperliquid built around USDC reserve yields.

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

This is where USDC's return truly impacts HYPE's pricing. Previously, the intensity of HYPE buybacks depended mainly on trading volume – the more active the trading, the higher the protocol revenue and buyback capacity. However, with the addition of USDC reserve yield, HYPE's buyback source no longer solely depends on trading fees but also on how much stablecoin capital Hyperliquid can attract and hold. In other words, trading fee buybacks represent platform trading activity, while USDC reserve yield buybacks represent the platform's capital retention capacity. The market is repricing HYPE precisely because it observes that HYPE's buyback narrative is no longer solely reliant on trading heat.

Hyperliquid Integrates HIP-4, Entering the Prediction Market Arena

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

On May 2, Hyperliquid launched HIP-4 Outcome Markets on mainnet, initially offering BTC binary outcome contracts. Simply put, users can trade on whether BTC's price will be above a specified level at a certain time. The contract price fluctuates between 0.001 and 0.999, reflecting the market's probability assessment of the event occurring; it settles to 1 if the event occurs and 0 if it does not.

Data from Predictefy shows that on its launch day, the trading volume for BTC price-related event contracts on HIP-4 reached $6.15 million. Within this specific market segment, Hyperliquid's volume far exceeded similar markets on Kalshi, Polymarket, and other prediction markets.

For HYPE, the significance of HIP-4 extends beyond just another product feature. It connects prediction markets to HYPE's staking, fee, and buyback mechanisms. As designed, future permissionless deployment of prediction events will require market creators to stake 1 million HYPE, which is higher than the 500,000 HYPE needed for deploying perpetual markets under HIP-3. Each staked position can support rolling and periodic markets, and can be reused after settlement; staked assets may be slashed in cases of oracle manipulation, abnormal market states, or prolonged downtime.

Therefore, HIP-4 doesn't just add a prediction market concept to HYPE's narrative; it creates a more direct value capture path. More permissionless prediction events mean higher demand for HYPE staking, and more trading volume means higher fee revenue, which ultimately flows back into Hyperliquid's existing buyback logic.

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

Beyond ETFs and USDC yield flows, RWA is further pushing Hyperliquid's trading boundaries.

Data indicates that the total open interest for RWA trading on the Hyperliquid platform has surged to $2.6 billion, a new all-time high and double the figure from two months ago. This data suggests that Hyperliquid is now handling not just demand for crypto assets like BTC, ETH, and SOL, but real-world assets are also starting to form scale within its on-chain trading system.

This is crucial for HYPE's valuation. If Hyperliquid were just a Perp DEX, its valuation anchor would primarily be the crypto cycle, trading volume, and fee revenue. But RWA opens up another dimension – stocks, commodities, precious metals, Pre-IPO assets, etc., could all become objects of 24/7 on-chain trading.

The significance of RWA for Hyperliquid is not just adding more trading pairs; it pulls the platform out of the internal competition of the crypto market. Perp DEXs compete for a larger share of crypto trading volume, but RWA competes on who can move the trading demand for off-chain assets onto the chain. If Hyperliquid can continue to grow this market, HYPE's valuation will no longer solely follow the crypto market trading cycle but will begin to tie itself to the larger demand for real-world asset trading.

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

Potential regulatory easing by the US SEC for tokenized stocks is also raising Hyperliquid's long-term ceiling. According to reports, the US SEC is preparing an innovative exemption for tokenized stock trading, allowing tokens linked to publicly traded company stocks to be traded on crypto platforms. In some cases, the relevant platforms might not need to complete full broker-dealer or exchange registration, and third-party issued tokenized stocks might not require the listed company's consent.

This is significant for Hyperliquid not because it will start tokenized stocks from scratch, but because it adds regulatory imagination to the RWA direction it is already pursuing. On Hyperliquid, trading for real-world assets like stocks and Pre-IPO assets is already taking shape, and RWA open interest has hit new highs. If US regulators genuinely open a testing window for tokenized stocks, the demand for this type of on-chain trading could be further amplified.

For Hyperliquid, clearer regulatory boundaries mean less friction for real-world asset on-chain trading. The platform poised to capture the resulting influx is often not a single asset issuer, but one that can provide the order book, liquidity, and settlement layer. If tokenized stocks move from a grey experimental area to compliant growth, Hyperliquid's already running RWA business won't just be an early experiment but could become the main battleground for the next round of on-chain trading competition.

Fundamentals Are Strengthening, but Short-Term Enters Long-Short Battle Zone

HYPE's bullish logic is becoming clearer. ETFs open compliant capital gates, USDC's return brings potential buyback increments, and RWA, prediction markets, and tokenized stocks continue to broaden Hyperliquid's trading boundaries. All these changes point in one 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 doesn't mean the short-term price will rise in a straight line. According to on-chain data, HYPE currently exhibits a massive confrontation between large long and short whales, with the top 1 and top 2 whale positions being directly opposing forces, totaling over $60 million. The longs are betting on Hyperliquid's future growth potential, while the shorts are betting on a pullback after the rapid short-term price increase. As whale positions magnify, HYPE's short-term price might be influenced not just by fundamentals but also by leverage liquidation, funding rates, and market sentiment.

Therefore, HYPE's short-term price trajectory is difficult to predict, largely depending on which side of the long-short battle is forced out first. However, over the long term, HYPE's fundamentals remain compelling for the market. Hyperliquid is continuously expanding its traded assets, capital sources, and revenue streams, with HYPE serving an increasingly core role as a value carrier through buybacks, staking, and fee capture.

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