ETF HYPE: Hyperliquid Starts Stronger than Bitcoin

2 months of trading and already nearly $300 million in net inflows. Relative to the market capitalization of HYPE, the flows captured by U.S. ETFs dedicated to Hyperliquid exceed those recorded by Bitcoin, Ethereum, Solana, and XRP funds at the same stage of their launch. However, this comparison should be approached with caution: in absolute terms, Bitcoin remains far ahead. But, on the scale of a token capitalizing around $13 billion, these amounts represent considerable buying pressure.

Key Points

• HYPE ETFs have captured about $300 million since mid-May, which is 2.3% of the token's market capitalization.
• Bitcoin ETFs absorbed only 0.2% of BTC's market capitalization during their first three weeks of trading in 2024.
• HYPG, the Grayscale ETF launched on June 3, distributes staking rewards and already has an asset value of $128.6 million.
• Hyperliquid has surpassed $1 billion in cumulative revenue, with nearly 99% reinvested in HYPE buybacks.

HYPE ETFs Start Stronger than Bitcoin ETFs

The comparison published by Grayscale reports the cumulative inflows of various ETFs relative to the market capitalization of their underlying cryptocurrency over an equivalent launch period. According to this method, HYPE funds show a faster start than Bitcoin, Ethereum, Solana, and XRP ETFs.

Bitcoin ETFs attracted about $1.6 billion during their first three weeks of trading in January 2024. This amount is significantly higher in absolute terms but corresponds to only 0.2% of BTC's market capitalization at that time. By early July, HYPE funds had absorbed the equivalent of about 2.36% of the token's market capitalization.

This relative performance is partly explained by the much smaller size of the HYPE market. A few hundred million dollars have little effect on an asset weighing several hundred billion, but become significant for a cryptocurrency capitalizing between $12 and $14 billion.

The contrast was particularly evident in June. HYPE ETFs recorded about $161 million in net inflows, while Bitcoin funds experienced over $4 billion in withdrawals. Ethereum ETFs lost nearly $529 million during the same period.

Three ETFs to Bet on Hyperliquid and Its Staking

The first American products, THYP from 21Shares and BHYP from Bitwise, were launched in mid-May. Grayscale then introduced HYPG in early June. These funds allow exposure to HYPE from a traditional brokerage account, without directly purchasing the token or managing a crypto portfolio.

Some of these products also stake a portion of the HYPE held. The rewards generated can thus benefit the fund and complement exposure to the token's price, after deducting fees and according to the specific terms of each issuer.

This demand is also based on the activity of Hyperliquid, which has become one of the leading decentralized perpetual contract exchanges. A large portion of the fees generated by the platform feeds into a support fund tasked with buying back HYPE on the market, adding another source of demand.

However, the dynamics are not linear. After nine consecutive weeks of inflows, HYPE ETFs recorded their first negative week in mid-July, with about $7 million in outflows. HYPE has also corrected since its June peak.

This initial halt serves as a reminder that flows remain volatile. The launch of HYPE ETFs demonstrates remarkable demand at the token level, but the comparison with Bitcoin measures relative intensity, not dollar dominance or a guarantee of sustained increases.

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