Hyperliquid is studying how shortly sentiment can flip in crypto.
In accordance with CryptoSlate information, HYPE, the token that powers the decentralized perpetuals change, has dropped to seven-month lows in December after a yr through which Hyperliquid seemed just like the default venue for on-chain leverage.
Throughout this era, the platform’s buying and selling volumes have stalled simply as newer platforms have surged on the again of incentives and factors campaigns. In consequence, it seems to be like a market share story that has flipped in opposition to Hyperliquid.
Nevertheless, two new forces at the moment are attempting to rewrite that narrative.
On Wall Avenue, Cantor Fitzgerald has stepped in with a 62-page initiation report that treats Hyperliquid much less as a reflexive DeFi token and extra as an change with money flows.
On-chain, the Hyper Basis has proposed successfully burning roughly $1 billion price of HYPE from a fee-funded treasury, a transfer designed to make shortage as seen as the worth chart.
Collectively, the protection and the burn sketch out a easy argument: Hyperliquid is just not dropping its core franchise, its token is structurally mispriced, and the market is staring on the fallacious metrics.
The expansion wall
Hyperliquid’s instant drawback is just not its mannequin however the market scoreboard.
For a lot of the final yr, the change might credibly declare to be the dominant perpetual futures DEX.
Nevertheless, that edge has narrowed within the second half of 2025. Aster, Lighter, and edgeX have flooded their platforms with factors packages and airdrop guarantees, pulling in what Cantor calls “level vacationers.” These are merchants who churn quantity to farm rewards relatively than categorical views.
In consequence, the mixed month-to-month perp quantity of Aster, Lighter, and edgeX, which was about $103 billion in June, has shot as much as $638 billion by November. Over the identical interval, Hyperliquid’s quantity barely moved, edging from roughly $216 billion to $221 billion.
In a market the place liquidity often follows the loudest incentives, that flat line seems to be like misplaced share.
Nevertheless, Cantor argues that this view is deceptive.
The agency said that the rival platforms are inflating exercise with round wash-like flows, whereas Hyperliquid hosts “natural” buying and selling that exhibits up in open curiosity, not simply notional turnover.
By evaluating quantity to open curiosity, the financial institution tries to point out that Hyperliquid’s customers deploy actual leverage relatively than gaming the scoreboard.
Notably, this logic has market precedent. Earlier cycles noticed NFT market Blur and a number of other Solana-based DEXs bootstrapping explosive quantity with reward schemes that didn’t all the time survive as soon as incentives tapered.
Nonetheless, the quantum of the shift is difficult to disregard. Even when a portion of Aster’s or Lighter’s quantity vanishes when rewards reset, they may probably retain some share of their new stream.
Certainly, Hyperliquid additionally used a factors system earlier than its token era occasion, which blunts the declare that it stands aside from the inducement recreation.
For now, merchants are voting with their keyboards. The protocol could have higher-quality stream, however the seen top-line development sits elsewhere.
A $1 billion HYPE ‘burn’
Towards that backdrop, the Hyper Basis’s transfer to “burn” its Help Fund seems to be much less like a routine governance tweak and extra like an try to rewrite the availability story.
The fund accumulates HYPE that the protocol repurchases with charges. By mid-December, it held about 37 million tokens, primarily funded by roughly $874 million in charges generated year-to-date in 2025, in accordance with Cantor.
These tokens sit in a particular system deal with that has by no means had a personal key. So, recovering them would require a tough fork.
The brand new proposal asks validators to formalize what’s already true in follow. By voting to deal with the Help Fund deal with as a useless pockets and pledging by no means to approve an improve that touches it, they remodel a technical element into express social consensus.
On paper, that removes roughly $1 billion from the absolutely diluted provide and erases virtually 13% of circulating tokens.
The mechanics don’t change the financial actuality that critical analysts already mannequin. Most elementary buyers deal with the Help Fund tokens as successfully out of circulation, since nobody can spend them with out an express protocol-level break.
However optics matter in crypto. Information aggregators and retail dashboards nonetheless depend these tokens in headline FDV. Reclassifying them as burned forces these screens to converge with Cantor’s “adjusted” figures, immediately making the token display cheaper per unit.
Is that beauty? Partly. The vote doesn’t mint new demand, and it doesn’t repair flatlining quantity. Nevertheless it does harden the dedication that future stewards is not going to attain for that pool in a downturn.
And in a market that obsessively tracks circulating provide and burn charges, tightening the denominator can nonetheless transfer the narrative, if not the basics, within the brief run.
The “change of change” thesis
Cantor’s report is designed to do the remainder of the work as a result of when costs and volumes look weak, the financial institution leans on money stream math.
It begins with Hyperliquid’s payment engine. Yr-to-date, the protocol has processed near $3 trillion in buying and selling quantity and generated roughly $874 million in charges, a lot of which is returned to HYPE by way of repurchases.
Contemplating this, the financial institution analysts deal with that loop because the on-chain equal of an change shopping for again its personal inventory. Over the long term, they argue, practically all financial worth accrues to token holders.
From there, the mannequin turns into easy: if Hyperliquid can develop its perps and spot enterprise at round 15% a yr for the subsequent decade, annual quantity reaches roughly $12 trillion.
At present payment schedules, that equates to greater than $5 billion in yearly protocol income. Apply a 25x a number of, comparable, in Cantor’s view, to a high-growth change or fintech, and also you arrive at a possible market capitalization of $125 billion, versus a totally diluted worth close to $16 billion right now.
The thesis rests on three pillars: that Hyperliquid reclaims share in perps as soon as factors campaigns elsewhere fade; that its new spot venue can push into double-digit DEX market share; and that its buyback engine continues to retire a significant chunk of provide every year.
Cantor calculates that, beneath its assumptions, the Help Fund might repurchase about 291 million tokens over a decade, slicing whole provide to roughly 666 million and pushing HYPE above $200 in ten years.
That may be a beneficiant consequence in a sector the place few initiatives maintain payment development by way of a full cycle. Crypto markets hardly ever reward discounted cash-flow logic throughout drawdowns; they commerce on flows, narratives, and funding situations.
For Cantor’s strategy to work, extra buyers have to begin treating HYPE as an fairness proxy, not simply one other altcoin with a buyback story.
RWAs, artificial shares, and the regulatory ceiling
The most important hole between the present worth and Cantor’s goal sits within the roadmap, not the current.
Hyperliquid already makes use of HIP-3 to show itself from a single change into what its backers name an “change of exchanges”: a base orderbook the place exterior groups can launch perp markets in the event that they stake 500,000 HYPE and settle for slashing danger.
The subsequent step, within the bullish script, is to increase that mannequin to real-world belongings.
Cantor sketches a future through which Hyperliquid lists tokenized inventory indices, non-public firm publicity, and commodities, undercutting conventional brokers with charges that may fall 90% beneath incumbent ranges.
Spot buying and selling already carries a better take-rate than perps, and the financial institution argues that if Hyperliquid wins even 20% of DEX spot stream and a sliver of artificial fairness buying and selling, spot alone might develop into a billion-dollar payment line.
Nevertheless, historical past counsels warning. Prior makes an attempt to deliver on-chain US fairness publicity, comparable to Mirror Protocol, bumped into securities-law headwinds lengthy earlier than they turned systemic.
Tokenized RWAs often face questions on licensing, disclosure, custody, and investor safety. So, even when Hyperliquid sticks to artificial exposures relatively than custodial tokens, success at scale would virtually definitely draw scrutiny from regulators who care extra about financial results than protocol design.
That’s the core disconnect within the present market pricing. Bulls see an infinite whole addressable market and a protocol prepared to compress charges to seize it.
Nevertheless, skeptics see a regulatory ceiling that won’t seem in a spreadsheet however weighs on each try to deliver Apple or Nvidia publicity to a permissionless chain.
For now, the strain stays unresolved. The muse has provided a burn to sharpen the shortage story. Cantor has equipped a mannequin that treats HYPE as a cash-flowing change enterprise with room to develop a number of instances over.
The charts, in the meantime, nonetheless present a token beneath strain and a venue preventing to maintain its place in a market obsessive about incentives.
Till Hyperliquid can show it will probably develop once more on phrases nearer to its personal, buyers are prone to deal with the burn and the bullish notice as a protection of the ground, not but a catalyst for a brand new excessive.