USDBitwise Pushes Hyperliquid Beyond Crypto With $600 Trillion Market Thesis
HYPE Buybacks, ETF Demand and Regulatory Shifts Drive Bitwise’s Bullish Case
TL;DR
- Bitwise CIO Matt Hougan said Hyperliquid is being undervalued because investors still treat it as a crypto-only platform.
- Bitwise’s BHYP ETF directs part of its management fee toward purchasing and staking HYPE.
- Hyperliquid routes around 99% of trading fees into HYPE buybacks through its Assistance Fund.
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Bitwise CIO Matt Hougan said Hyperliquid’s HYPE token is being fundamentally mispriced because investors continue valuing the platform as a crypto derivatives exchange rather than a broader financial trading network targeting global asset markets worth $600 trillion.
Hougan said investors are making “two errors” in valuing Hyperliquid. According to Hougan, the market is underestimating the scale of the opportunity Hyperliquid is pursuing while also failing to recognize how HYPE captures value generated by activity on the platform.
Hyperliquid is primarily known for decentralized crypto perpetual futures trading, but Bitwise’s investment thesis centers on the platform’s expansion into equities, commodities and prediction markets. Hougan said the market is still valuing Hyperliquid inside the roughly $3 trillion crypto market even though the company is pursuing a much broader financial trading opportunity.
“Today’s prices suggest you’re being offered the second at the cost of the first,” Hougan said.
Hougan compared Hyperliquid’s economics more closely to companies such as Robinhood and CME Group than to traditional DeFi protocols because the token’s structure directly links platform activity to token-holder value.
Hougan estimated that Hyperliquid generates between $800 million and $1 billion in annualized revenue. He also said HYPE trades at roughly 10 to 14 times its buyback stream, which Bitwise described as favorable relative to traditional exchange businesses.
Hyperliquid’s fee structure tied directly to HYPE demand
Bitwise’s thesis relies heavily on Hyperliquid’s Assistance Fund, which routes around 99% of platform trading fees into HYPE buybacks. The purchased tokens are then sent to a system address without a private key.
Hougan said the token’s structure was intentionally designed to reward holders as trading activity increases. “Hyperliquid’s token is explicitly designed so that rising trading activity on the Hyperliquid platform directly benefits token holders,” he said.
Validators voted 85% in favor in December last year to classify all HYPE held in the Assistance Fund address, including future revenue routed there, as permanently burned. The move removed about 13% of circulating supply, or roughly 37 million HYPE, from official supply statistics.
Bitwise also tied the economics of its newly launched Hyperliquid ETF directly to HYPE accumulation. The company said 10% of the management fee generated by the Hyperliquid ETF, ticker BHYP, will be used to purchase HYPE for Bitwise’s corporate balance sheet.
The purchased tokens will be staked through Bitwise Onchain Solutions, the company’s in-house staking division. Bitwise also takes a 15% fee on staking rewards before the remaining rewards are distributed through the structure.
BHYP began trading on the NYSE on the Friday before the May 19 reports. The ETF carries a 0.34% sponsor fee, although Bitwise waived the fee during the first month on the fund’s first $500 million in assets.
Combined first-week inflows into Bitwise’s BHYP and 21Shares’ THYP exceeded $5.6 million. BHYP also recorded $4.31 million in first-day trading volume, while combined spot HYPE ETF assets under management reached $18.59 million four days after launch.
Bitwise described BHYP as the first U.S.-listed Hyperliquid product to stake natively through the issuer’s own infrastructure instead of using a third-party validator.
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HYPE rallies as Hyperliquid activity accelerates
HYPE traded near $48 in the May 19 updates, with one figure placing the token near $47.90 and another around $48.70 at publication time.
One update said HYPE gained more than 8% over 24 hours. Another said the token rose more than 5% during the same period and climbed more than 13% over the week.
Separate figures showed HYPE advancing 20% during May while reaching new highs for 2026. Another update described the token as gaining more than 80% since the start of 2026, giving it a market capitalization of around $12.20 billion and making it the tenth-largest crypto asset at the time of publication.
HYPE also entered a price vacuum zone against Bitcoin at 61,420 sats, an area described as having fewer major blocks of limit sell orders. Crypto price figures referenced in the updates were tracked using COIN360 crypto price index data.
Hyperliquid’s real asset sector reached a new all-time high of $2.6 billion in open interest after doubling during the previous two months.
Hyperliquid also generated nearly 40% of all blockchain fees across the market during the prior week, outperforming both Ethereum and Solana on that metric.
Regulatory developments become part of Bitwise’s long-term thesis
Bitwise also connected Hyperliquid’s growth outlook to regulatory developments in the United States under SEC Chair Paul Atkins.
Recent comments from Atkins were described as supportive of financial “super-apps” capable of offering multiple asset classes under a single framework.
The U.S. administration was preparing a regulatory framework that could allow decentralized crypto platforms to trade tokenized versions of securities without requiring approval from the public companies themselves.
Atkins also reportedly acknowledged that older regulatory systems are incompatible with all-in-one blockchain-based financial infrastructure.
One update described those developments as effectively creating a path for Hyperliquid to launch a large-scale on-chain equities market.
Goldman Sachs was also mentioned as part of the broader institutional interest surrounding Hyperliquid. A Q1 2026 13F filing reportedly showed exposure to HYPE through shares of Hyperliquid Strategies, ticker PURR.
Hyperliquid’s partnership with Coinbase and Circle redirects stablecoin economics away from issuers and toward crypto trading venues, a shift analysts said could support continued HYPE demand while pressuring Circle’s margins.
FAQ
Why is Bitwise bullish on Hyperliquid?
Bitwise said investors underestimate Hyperliquid’s market opportunity and HYPE’s revenue-linked token structure.
What is BHYP?
BHYP is Bitwise’s Hyperliquid ETF listed on the NYSE.
How does Hyperliquid support HYPE demand?
Hyperliquid routes around 99% of trading fees into HYPE buybacks.
What market is Hyperliquid targeting?
Matt Hougan said Hyperliquid is targeting a $600 trillion global asset market.
This article has been refined and enhanced by ChatGPT.
