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Hello readers,
HYPE has been the best-performing asset of the current bear market, and it’s not even close. It’s up 114% vs BTC over the last 90 days, and 297% since inception.
But that’s probably the least interesting thing about HYPE right now. What’s more notable is that investors are currently “paying up” for each dollar of sales in the bear market. This is different. It’s something we haven’t seen from any other crypto asset in a bear market.
And it begs the question:
Is the attention HYPE is receiving from investors warranted? Or is the market now offside?
We explore in this week’s edition of The Watch List.
*Please note that you can click the data citation note under each chart to access the supporting dashboard for this week’s report.
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Let’s go.
Over the last 90 days (through 4.20.26), the Hyperliquid Perps DEX generated $153.8m in user fees — down 13% vs the prior 90 days, but up 12.3% y/y.
For reference, Ethereum generated $82m in REV in Q1. Solana did $89m. And Pump Fun did $103m.
Of the $153.8m in user fees generated over the last 90 days, 99% ($152.3m) was used for HYPE buybacks.
While HYPE has been the best-performing crypto asset in the current bear market (down 30% from its ATH), user activity and user fees remain indicative of bear market conditions.
With investor interest consolidating around HYPE over the last few months (largely due to oil futures trading over the weekend during the Iran conflict), we’ve yet to see HYPE trade into our “fair value” target zone for an optimal entry.
In fact, HYPE’s fully diluted price/sales ratio is currently near all-time highs. That’s an odd development in a bear market, when we typically see valuations drop faster than fundamentals.
More on HYPE’s valuation later in the report.
Open interest is currently $7.6b, down 51% from all-time highs, and down 15.4% over the last 90 days.
26% of the total open interest is currently held by HIP-3 DEXs, with Trade XYZ accounting for 92% of that share. More on HIP-3 later in the report.
In terms of open interest amongst Perps DEXs, HYPE currently has a 72% market share. If we expand to all Perps exchanges (including CEXs), HYPE currently has a 10.7% market share.
The leading CEXs in terms of Perps open interest are Binance ($26.1b), Bybit ($12.1b), and Gate ($10.1b).
Over the last 90 days, the Perps DEX is averaging $7.07b in volume/day, up 6% q/q and 18% y/y.
40% of volumes came from BTC trading, with 26% coming from RWAs (oil, stocks), and 18% coming from ETH trading. HYPE and SOL trading accounted for roughly 4% of the Perps DEX volumes over the last 90 days.
HIP-3 DEX volumes account for 36% of total volumes over the last 90-days, with Trade XYZ owning a 87% market share amongst HIP-3 DEXs on Hyperliquid.
Across all Perps exchanges (CEX + DEX), Hyperliquid currently has a 5% market share.
Bridged capital into Hyperliquid is currently at $3.36b, down 44% from an all-time high of $6b.
Over the last 90 days, the Hyperliquid/Arbitrum bridge has seen $730m of capital flee the network. Of that, $500m has been bridged out since early April — an indication that Hyperliquid users may be wary of potential security concerns.
Given the recent barrage of hacks across DeFi, we imagine this bridge is viewed as the largest “honey pot” in DeFi. Our understanding is that bridge deposits and withdrawals are signed by the Hyperliquid validator set, and actions are accepted once 2/3 of stake-weighted validator power has signed. There are only 24 active validators on Hyperliquid securing consensus today.
Therefore, the security of the $3.36b in the bridge depends on the honesty and availability of the (relatively small) Hyperliquid validator set (not on Ethereum/Arbitrum verifying the Hyperliquid state in a fully trust-minimized way).
Total active addresses on Hyperliquid averaged 46k/day over the last 90 days, up 6.6% q/q and 100% y/y.
BTC trading accounts for 33%, with ETH, SOL, and HYPE each accounting for roughly 13%.
“Others” accounted for 25% of active users, with the vast majority trading oil futures.
Launched in October of last year, HIP-3 lets third parties build their own perpetual DEXs on Hyperliquid, with separate order books, margin systems, and market settings, while still using Hyperliquid’s underlying infrastructure.
“Exchange as a service” for anyone who wants to offer perps trading on any assets.
Economically, the 3rd party deployer monetizes the venue through a trading-fee share. Hyperliquid takes a fixed 50%, with user fees on HIP-3 DEXs set at 2x the usual validator-operated perp fees on the core Hyperliquid Perps DEX. Therefore, Hyperliquid still earns the same fee on HIP-3 trades as on the core Hyperliquid Perps DEX.
HIP-3 volume averaged $2.58b/day over the last 90 days, up 973% q/q.
This accounts for 36% of the average daily volume of the core Hyperliquid DEX over the last 90 days.
Trade XYZ currently has a 87% market share amongst HIP-3 DEXs.
Over the last 30 days, Oil Futures made up nearly 50% of trading volume on HIP-3 DEXs. Silver futures accounted for 11% of volumes, Gold was 4%, and the S&P 500 was 9.5%.
Total Open Interest on HIP-3 DEXs is currently $2.06b (26% of the core Hyperliquid DEX), up 317% q/q but down from 14% from the peak of $2.4b in early April.
Trade XYZ currently has a 92% market share in Open Interest amongst HIP-3 DEXs.
Total unique traders on HIP-3 DEXs averaged 27.5k/day over the last 90 days, up 352% q/q.
Trade XYZ currently has a 85% market share amongst HIP-3 DEXs in terms of unique traders.
Launched in February of last year, the HyperEVM is an Ethereum-compatible execution layer of the Hyperliquid blockchain. It's designed to allow an ecosystem of applications to be built “on top” of the liquidity and user base established by the Hyperliquid Perps DEX.
If successful, it could compete with larger L1s such as Solana and Ethereum.
Base fees + priority fees are burned, accruing value to HYPE users. HyperEVM validators are compensated purely on new HYPE issuance.
Total REV on the HyperEVM was $1.84m over the last 90 days, down 33% q/q.
Again. These fees (base + priority fees) are burned, accruing value to HYPE holders.
The HyperEVM averaged just 9.8k active addresses/day over the last 90 days, down 28% q/q.
The question moving forward is whether or not there is durable demand to build non-perp-related applications on Hyperliquid. The jury is still out on this.
Stablecoin supply on the HyperEVM is currently $1.83b, up 170% q/q.
The growth can be attributed to USDC deployments, which make up 81% of the stablecoins on the HyperEVM.
Tether has $175m in stablecoins on the HyperEVM, accounting for 9.6% of the market share.
The HyperEVM averaged roughly $500m of stablecoin volume/day over the last 90 days, up 8.6% q/q.
USDC accounts for 55% of the volume, with Tether accounting for 32%.
Max Supply: 1,000,000,000
Released Supply: 425,244,480 (42.5%)
Circulating Supply: 238,385,315 (23.8%)
Genesis Airdrop: 31%
Future Emissions & Community Rewards: 38.88%
Core Contributors: 23.8%. Unlocks began in November 2025 and end in November 2027. More on unlocks below.
Hyper Foundation Budget: 6%
Community Grants: 0.3%
HIP-2 (Hyperliquidity): 0.012%
As noted, Hyperliquid “bought back” 99% of its fees over the last 90 days (152.3m)
In addition to the programmatic buybacks from user fees on the core Hyperliquid Perps DEX, HYPE is now being burned via the HyperEVM (though it is immaterial due to low usage in its nascent stage).
Over the last 90 days, the protocol has issued 2.4m HYPE to validators as compensation for securing the network (network inflation). This was offset by 4.5m HYP buybacks, resulting in net issuance of 2.08 million HYPE (deflationary).
We believe this is currently the strongest token economic structure in crypto. When you combine it with the fact that there are no early investor unlocks (HYPE has no VCs), it’s even better.
Core contributor unlocks began in November 2025 and end in November 2027. 22% of the total allocation is currently unlocked, with 9.9 million HYPE unlocking per month ($406m/month at the current HYPE price of $41).
The key question regarding future unlocks outside the core team concerns the 38.88% allocated to “future rewards.” It’s currently unclear if/when these tokens will be used for growth, if at all.
HYPE’s fully diluted p/s ratio is currently 47.3, and up 67% q/q. It’s now pushing toward an all-time high.
To our knowledge, this is the first time we’ve seen a crypto asset’s valuation rise relative to its fundamentals in a bear market. We typically see the opposite, especially in the first half of a bear market (when 365-day look-backs, when market conditions were stronger).
For reference, HOOD currently has a p/s ratio of 18.7x. PUMP is currently trading at a P/S ratio of 4.5x.
If we price the network based on circulating market cap, the p/s drops to 17.1x (PUMP is 1.5x based on circulating market cap).
HYPE’s buyback yield (based on FD market cap) is currently 2.55%, down from a peak of 4%.
Again, this shows that HYPE’s buyback yield is declining relative to the network’s fully diluted value.
If we base the yield on circulating market cap, it jumps to 6.3% (down from a peak of 12%).
The chart speaks for itself. HYPE has outperformed BTC since the token launched in late December of ‘24.
It’s up 114% vs. BTC over the last 90 days and 297% since inception.
Again. This is something we typically do not see in bear markets.
HYPE is currently trading well above its 50 WMA. In fact, it dipped below for less than two months in the current bear market. Again. This is an anomaly across the crypto ecosystem.
The Arbitrum Bridge. As noted, this is governed by a relatively small validator set (24). Users must trust the honesty and integrity of these validators.
Valuation. We think HYPE is currently overvalued — largely due to the attention the token has received via 24/7 oil futures trading during the Iran war.
Competition. While HYPE controls market share amongst crypto-native DEXs, it still accounts for just 5% of volumes on CEXs. In fact, Coinbase’s Perps product did roughly the same volume as Hyperliquid over the last 90 days. Further competition exists among top CEXs, with Robinhood now entering the market as well.
Attention has thus far consolidated around HYPE in the current bear market (rightly so). However, fundamentals are declining relative to HYPEs valuation.
That’s not a great setup for us as contrarian investors. As such, we currently do not hold any HYPE in our TDR Pro portfolio. But we’ll be looking to add on any “fat pitch” opportunities that come our way.
If you’d like to be notified if/when we add HYPE to our active portfolio (or any other assets), you can subscribe to TDR Pro and get one month free here.
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Disclaimer: Individuals have unique circumstances, goals, and risk tolerances, so you should consult a certified investment professional and/or do your own diligence before making investment decisions. The author is not an investment advisor and may hold positions in the assets covered. Certified professionals can provide individualized investment advice tailored to your unique situation. This research report is for general educational purposes only, is not individualized, and as such should not be construed as investment advice. The content contained in the report is derived from both publicly available information as well as proprietary data sources. All information presented and sources are believed to be reliable as of the date first published. Any opinions expressed in the report are based on the information cited herein as of the date of the publication. Although The DeFi Report and the author believe the information presented is substantially accurate in all material respects and does not omit to state material facts necessary to make the statements herein not misleading, all information and materials in the report are provided on an “as is” and “as available” basis, without warranty or condition of any kind either expressed or implied.