Why is Hyperliquid rising so much? The real reason behind its all-time high

▲ Hyperliquid/Source: X ©

Hyperliquid has set a new all-time high, driven by ETF expectations and the effect of large-scale buybacks. In particular, analysis suggests that the project's own continuous buying structure is creating strong upward pressure by inducing a reduction in supply.

According to cryptocurrency media Watcher.Guru on May 26 (local time), Hyperliquid (HYPE) surged to $64.27 on the 24th, recording an all-time high. Although it has since undergone a 2.3% correction in the last 24 hours, it has risen by 29.2% in the last 7 days, 49.6% in the last 14 days, and 49.5% in the last month, according to CoinGecko. Compared to the end of May last year, the price has soared by over 60%.

The media cited the effect of ETF launch as the primary reason for this rise. It explained that market expectations rapidly grew after a Hyperliquid-related ETF was unveiled earlier this month, leading to a continuous influx of funds from investors. Furthermore, the fact that US investment bank Goldman Sachs purchased 654,630 shares of Hyperliquid Strategies Inc. (PURR), a Hyperliquid strategy company, worth approximately $3.3 million through a filing with the US Securities and Exchange Commission (SEC) also stimulated investment sentiment.

The fact that the Hyperliquid decentralized exchange offered investment exposure products to unlisted SpaceX shares also attracted attention. It is evaluated that the project's recognition significantly expanded by providing related investment opportunities in the pre-IPO stage of SpaceX.

However, Forbes pointed to the project's buyback structure as the core reason for the price surge. According to the media, Hyperliquid continuously buys back HYPE using most of its protocol revenue, and this buyback system is designed in an automated form within the protocol. Forbes analyzed, "Hyperliquid buys back HYPE with most of the revenue it earns," and "This structure ensures that buybacks continue regardless of the trust of external investors."

In particular, the structure where buybacks cannot be stopped even if the board of directors wishes to do so is also increasing expectations for supply reduction. Hyperliquid Strategies Inc. is also designed with the purpose of holding HYPE, further strengthening the effect of reducing market circulation. The market sentiment suggests that there is a possibility of further increases if project revenue continues to grow and investment demand expands.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*