- Majors Choppy, HYPE Continues to Lead: It was a relatively uneventful session for the majors, with BTC, ETH, and SOL largely trading in tight ranges. SOL modestly outperformed, up ~1.5% on the day, but once again paled in comparison to Hyperliquid, which continues to stand out as one of the few standout performers in crypto YTD. HYPE traded to another all-time high intraday, briefly touching ~$62 before meeting some supply and retracing modestly.
- Perps Market Not Showing Meaningful Froth: Despite the strong move, the derivatives backdrop still does not appear especially euphoric. Funding rates remain well below levels observed during the prior ATH period and were actually negative as recently as yesterday, helping explain today’s short squeeze higher. Open interest has risen, but remains roughly in line with prior peaks and appears considerably healthier when paired with the more muted funding environment. Taken together, this still looks more like a spot-led move than an excessively leveraged speculative blowoff.
- DAT Flywheel Still Appears Active: Hyperliquid Strategies continues to post extremely strong trading activity, recording another session with >$200M in daily volume. The stock remains above NAV, which preserves the company’s ability to issue equity via its ELOC and accumulate additional HYPE. In effect, the DAT flywheel we discussed earlier this week still appears intact. Importantly, this is now being supplemented by ETF-related demand, with recently launched Hyperliquid ETFs reportedly seeing encouraging early traction from TradFi-adjacent investors.
- Unstaking Queue Worth Monitoring: The primary near-term source of potential sell-side pressure remains the unstaking queue. Current queued unstaking activity amounts to roughly ~$460M worth of HYPE. While it is impossible to know exactly how these tokens will ultimately be used, some portion is likely destined for profit-taking given the magnitude of gains. Importantly, the seven-day cooldown period means this supply is unlikely to immediately hit the market, but it is still a variable worth monitoring over the next week or so.
- Fundamental Valuation Framework Still Suggests Upside: One of the more compelling aspects of Hyperliquid remains the fact that it is fundamentally cash-flow generative. Even using relatively simple valuation work against TradFi exchange comps such as CME, ICE, and Nasdaq, there still appears to be a reasonable case for additional upside depending on how one thinks about token supply. On a circulating market cap basis, HYPE screens materially cheaper than on a fully diluted basis, and the market increasingly appears to be anchoring toward the former framework. Applying upper-end exchange multiples to adjusted earnings that incorporate the recent USDC reserve income deal still suggests meaningful upside potential from current levels.
- Miners Continue to Benefit from AI Tailwinds: Beyond Hyperliquid, the other area continuing to work within crypto remains the mining complex. Several names showed strong relative performance again today following Nvidia earnings. Amid rising yields and an uncertain Fed backdrop, AI-linked infrastructure continues to be one of the cleaner secular growth themes in markets.
- Macro Backdrop Still Matters: While crypto-specific narratives remain supportive for select assets, the broader macro backdrop remains somewhat uncertain. There were market rumors today suggesting incremental progress toward a potential U.S.-Iran deal, which likely contributed to weakness in crude. BTC and crude have maintained a relatively tight inverse relationship in recent weeks, so any sustained decline in oil prices could provide some relief for crypto and broader risk assets. At the same time, tomorrow’s swearing-in of Kevin Warsh could introduce additional volatility depending on how aggressively he signals around the future policy path, if at all.
- Bottom Line: Hyperliquid continues to separate itself fundamentally and structurally from the broader crypto market. Between the still-benign derivatives backdrop, active DAT flywheel, improving institutional participation, and strong fundamental earnings profile, I still think there is a reasonable case for additional upside despite the magnitude of the recent rally. At the same time, the broader macro environment remains challenging enough that I continue to prefer letting relative winners run while maintaining a cash buffer for flexibility.
Tickers in this video: BTC 1.52% ETH 2.34% SOL 1.32% HYPE 7.76% PURR
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