Hyperliquid (HYPE) burns $400 million, reaches all-time high... Is Binance curbing its rise?

▲ Hyperliquid (HYPE)/AI generated image

Hyperliquid (Hyperliquid, HYPE) reached an all-time high with buybacks exceeding $400 million. However, Binance's market encroachment has emerged as a new variable.

According to Cointelegraph, a cryptocurrency specialized media outlet, on September 14 (local time), Alice Liu, Head of Research at CoinMarketCap, emphasized that Hyperliquid's network activity and HYPE price should be viewed separately. She pointed out that Binance is rapidly expanding its influence in the Real World Asset (RWA)-based perpetual futures market.

Liu said, “After Binance launched RWA perpetual futures, trading volume and liquidity quickly shifted to Binance.” Binance accounts for about 50% of the total market. However, Hyperliquid still maintains its lead in the decentralized exchange (DEX) market. Liu assessed Hyperliquid as a key trading venue where liquidity and product scale are concentrated.

The key driver pushing up HYPE's price is buybacks. HYPE recently hit an all-time high of $86. Its 30-day increase also reached 47.5%. Hyperliquid has spent over $400 million on token buybacks to date. Liu explained, “Part of the recent price surge is supported by buybacks.”

The problem is that the buyback funds depend on network revenue. If trading volume and liquidity move to Binance, Hyperliquid's revenue base could also be pressured. Liu stated, “The key is whether it can generate enough network activity and revenue to sustain buybacks and support the current price level.” Since the amount of HYPE currently unlocked is small, future token unlocks are expected to continue.

Liu maintained a bullish view on Hyperliquid. In contrast, she showed a much more cautious attitude towards AI tokens without practical use cases. He said, “AI tokens from the previous cycle that rely solely on concepts without use cases or infrastructure could see their value drop to zero.”

[Article Key Summary]

-Hyperliquid has invested over $400 million in HYPE buybacks, and HYPE recently recorded an all-time high of $86.

-As Binance accounts for approximately 50% of the RWA perpetual futures market, trading volume and liquidity are rapidly shifting.

-Alice Liu analyzed that whether Hyperliquid can generate enough revenue to sustain buybacks is a key variable for HYPE.

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