Hyperliquid’s native token, HYPE, surged to a fresh all-time high early Wednesday, extending its remarkable rally this year as the decentralized exchange—renowned for on-chain perpetual trading—continues to see record activity.
The token crossed the $50 mark for the first time, gaining roughly 8% in the past 24 hours. Since its April low, HYPE has soared 430%, representing a 15-fold increase from its November debut price of around $3.
The rally has been fueled by exceptional trading volumes and Hyperliquid’s automated buyback mechanism, which steadily removes tokens from circulation, creating sustained market demand.
Record Trading Volumes
According to DefiLlama, the decentralized exchange recorded more than $357 billion in derivatives trading volume in August, up from $319 billion in July and nearly ten times the figure from a year ago. Spot trading also hit a record, surpassing $3 billion for the week ending 24 August, per Blockworks data.
These trading flows translated into significant revenue for the protocol. Hyperliquid collected $105 million in trading fees during August, the highest monthly total this year. Much of these earnings are directed into the Hyperliquid Assistance Fund, an automated on-chain mechanism that purchases HYPE tokens on the open market. This approach generates consistent buy pressure while reducing the circulating supply.
Since launching in January, the fund’s holdings have expanded from 3 million to 29.8 million HYPE tokens, now valued at over $1.5 billion, supporting the ongoing rally.
On the institutional front, digital asset custodian BitGo added support on Tuesday for the HyperEVM network, which underpins Hyperliquid’s ecosystem, paving the way for broader institutional adoption of HYPE and related applications.
Analysts Highlight Strengths and Risks
In a recent research note, ByteTree analysts Shehriyar Ali and Charlie Morris described Hyperliquid as a “powerhouse” and the largest decentralized perpetual futures platform.
“Hyperliquid is among the most compelling protocols in DeFi today,” the note stated. “Its strong fundamentals, record-breaking fee generation, and dominant market share make it impossible to ignore.”
However, the analysts also cautioned about potential risks. HYPE currently trades at a fully diluted valuation (FDV) exceeding $50 billion, despite only about a third of its total supply being in circulation, giving it a market capitalization of $16.8 billion.
Scheduled token unlocks beginning in November could introduce selling pressure and test the resilience of demand, the report added.
“Although the token has seen a sharp run-up in recent months, its robust on-chain activity continues to underpin its valuation,” the analysts concluded.
