Why is HYPE still surging? Has it peaked?

Original: Odaily Planet Daily (@OdailyChina)

Author: Asher (@Asher_0210)

In the current crypto market, if there is one altcoin capable of exciting 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 now 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.

Previously, external understanding of Hyperliquid largely centered on it being a high-performance perpetual DEX. However, capital now is clearly not just buying a decentralized exchange token; it is betting that Hyperliquid can 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 reevaluation of Hyperliquid's value.

This article from Odaily Planet Daily will dissect the logic behind HYPE's rise through 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 ETF channels.

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 (Eastern Time), 21Shares Hyperliquid ETF THYP had a total net inflow of $12.901 million; Bitwise Hyperliquid ETF BHYP had a total net inflow of $2.0446 million.

More critically, Bitwise did not stop at merely 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, and these HYPE holdings will also be staked.

This transforms the ETF narrative from a simple product launch into a source of potential ongoing buying pressure. The larger the ETF's scale, the higher the management fee income, and theoretically, the greater the amount Bitwise can use to increase its HYPE holdings. In the short term, this capital may not immediately sway the price; but in the long run, it connects ETF growth, asset manager revenue, and HYPE holdings.

In other words, the ETF brings HYPE not just one-time hype, but a new capital channel. HYPE is beginning to transition from a native crypto asset to a token representing an on-chain trading platform that traditional capital can also help price.

USDC Returns to Hyperliquid: HYPE Gains Over $400,000 in Potential Daily Buying Pressure

The second reason for HYPE's recent rise is that with USDC returning to Hyperliquid, the market is recalculating the protocol's future stable yield and whether this yield can continue to flow towards HYPE buybacks.

According to Hyperliquid's official announcement, Coinbase will act as a capital deployer, while 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 an ordinary stablecoin integration but a new mechanism established by Coinbase, Circle, and Hyperliquid centered 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. Although specific split ratios haven't been announced, referencing the previous USDH yield distribution mechanism, Hyperliquid might actually receive approximately 90% of the reserve yield. Therefore, the market interprets AQAv2 as a protocol-level revenue-sharing mechanism established by Hyperliquid for USDC reserve yields.

Based on community estimates, assuming a scale of $4.7 billion and an annualized yield of 3.8%, the USDC reserve yield would correspond to roughly $160 million in annualized revenue, translating to approximately $440,000 in 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 could gain a relatively stable source of cash flow.

This is where the return of USDC truly impacts HYPE's pricing. Previously, HYPE's buyback intensity primarily depended on trading volume – the more active the trading, the stronger the protocol's revenue and buyback capability. But with the addition of USDC reserve yield, HYPE's buying pressure no longer relies solely on 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 accumulation ability. The market's repricing of HYPE might be precisely because it observes that HYPE's buyback story is no longer dependent only 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 crypto sectors this year – prediction markets.

On May 2, Hyperliquid launched HIP-4 Outcome Markets on its mainnet, first introducing BTC intraday binary outcome contracts. Simply put, users can trade whether BTC's price will be above a specified level at a certain point in time. The contract price fluctuates between 0.001 and 0.999, reflecting the market's pricing of the event's probability; it settles at 1 if the event occurs and 0 if it doesn't.

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

For HYPE, the significance of HIP-4 goes beyond adding another product feature. It connects prediction markets with HYPE's staking, fees, and buyback mechanisms. According to the design, when permissionlessly deploying a prediction event in the future, market creators need to stake 1 million HYPE, which is higher than the 500,000 HYPE required for deploying perpetual markets under HIP-3. Each staking position can support rolling and periodic markets and can be reused after settlement. Staked assets can be slashed in cases of oracle manipulation, abnormal market conditions, or extended downtime.

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

RWA Open Interest Hits New High: Hyperliquid's Ceiling Extends Beyond Perp DEX

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

Data shows 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 indicates that Hyperliquid is no longer just handling trading demand for crypto assets like BTC, ETH, and SOL; real-world assets are also beginning to form significant scale within its on-chain trading system.

This is crucial for HYPE's pricing. If Hyperliquid were merely a Perp DEX, the market's valuation anchor would primarily be the crypto cycle, trading volume, and fee income. However, RWA opens up a different 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's pulling the platform out of the intra-crypto market competition. Perp DEXs compete over who can capture more crypto trading volume, but RWA competition is about who can bring trading demand for off-chain assets onto the chain. If Hyperliquid can continue to grow this segment, HYPE's pricing will no longer merely track the crypto market trading cycle but will start to be tied to the larger trading demand for real-world assets.

SEC Plans Tokenized Stock Exemption: Adding Imagination to the RWA Narrative

Potential regulatory easing by the U.S. SEC regarding tokenized stocks continues to raise Hyperliquid's long-term ceiling. Reports suggest the SEC is preparing to introduce an innovation exemption for tokenized stock trading, allowing tokens pegged to the stocks of publicly traded companies to trade on crypto platforms. In some cases, the related platform might not need full broker-dealer or exchange registration, and tokenized stocks issued by third parties might not even require the consent of the listed company.

The significance for Hyperliquid is not starting from scratch on tokenized stocks but adding regulatory imagination to the RWA direction it is already pursuing. On Hyperliquid's platform, trading of real-world assets like stocks and Pre-IPO assets is already scaling, with RWA open interest hitting new highs. If U.S. regulators truly open a test window for tokenized stocks, the demand for this type of on-chain trading could be significantly amplified.

For Hyperliquid, the clearer the regulatory boundaries, the lower the friction for real-world asset on-chain trading. Those better positioned to capture this incremental growth are often not single asset issuers but platforms capable of handling order books, liquidity, and settlement. If tokenized stocks move from gray-area experiments to compliant growth, Hyperliquid's already-running RWA business won't just be an early experiment; it could become the main battleground for the next wave of on-chain trading competition.

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

The logic behind HYPE's rise is becoming clearer. ETFs open compliant capital inflows, the return of USDC brings potential buyback increments, and RWA, prediction markets, and tokenized stocks continue to widen 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 short-term prices will rise in a straight line. According to on-chain data, HYPE is currently witnessing a massive confrontation between large long and short whales, with the top 1 and top 2 whale positions acting as counterparties, 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 increase in size, HYPE's short-term price may no longer be driven solely by fundamentals but will also be influenced by leverage liquidations, funding rates, and market sentiment.

Therefore, predicting HYPE's short-term price trajectory is difficult and depends more on which side is forced to exit first. However, looking at the longer term, HYPE's fundamentals remain compelling. Hyperliquid continues to expand its trading assets, capital entry points, and revenue sources, while HYPE is playing an increasingly central role as a value carrier in buybacks, staking, and fee capture.

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