JPMorgan says inflows into Hyperliquid's HYPE exchange-traded funds have stalled after leading altcoin ETF flows in May and June, as competing products and centralized rivals draw investor capital away. The bank's report points to a token-buyback program as one of the few forces still supporting HYPE.
Hyperliquid's spot HYPE funds have gone from Wall Street's fastest-growing altcoin bet to a source of outflows in about two months. BHYP and THYP, the first US-listed spot ETF products for Hyperliquid's token, launched between May 12 and May 15 and pulled in $25.5 million in a single day on May 20, a debut that outperformed bitcoin ETFs on a market-cap-adjusted basis during multiple of their own first sessions.
A fast start reverses
Cumulative net inflows reached roughly $75 million by late May. That figure swelled to around $280 million by June and July. But July marked the turn: the funds logged more than $13 million in net outflows for the month.
The bleeding continued into August, with a $29.8 million net outflow streak across 12 consecutive sessions through August 3. HYPE's price dropped roughly 13% from its June peaks during July.
JPMorgan points to mounting competition
JPMorgan analysts led by Nikolaos Panigirtzoglou attributed the slowdown to growing competition from regulated centralized derivatives platforms and crowded prediction markets. In a Thursday report, the analysts wrote: "We see significant challenges to the market share of decentralized platforms such as Hyperliquid." The bank said the rollout of U.S.-regulated crypto perpetual futures products could shift trading activity away from offshore venues such as Hyperliquid, a decentralized exchange that remains exposed to licensing, compliance and investor-protection concerns.
Buybacks provide a buffer
Even amid the outflows, Hyperliquid's Assistance Fund funnels roughly 99% of the platform's trading fees into buying HYPE on the open market. Those buybacks have totaled over $1 billion in certain periods. That gives HYPE a structural buyer independent of Wall Street sentiment, though the fund is not invincible, as the July drawdown showed.
Despite the pause, Hyperliquid remains the fourth-largest asset held in corporate crypto treasuries, behind bitcoin, ether and solana. Its ETFs still trail the majors by a wide margin.
Bitcoin funds hold roughly $77 billion in assets. Ether funds hold about $10 billion. ETFs tied to solana, XRP and Hyperliquid together hold just $2 billion to $3 billion.
Sources: CoinDesk, Crypto Briefing
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