Hyperliquid’s tokenomics currently seem confusing. Despite concerns about the token’s value decreasing due to new tokens being released and unlocked, the price actually rose to a record high above $63. This might not make sense at first, but it’s explained by how traders are actually buying and selling the token.
Hyperliquid’s unending revenue stream
The biggest concern right now is the project’s fully diluted valuation (FDV). While not all tokens are currently available, the market knows millions more will be released over time, and HYPE’s current circulating supply is much lower than its total potential supply. Despite only a small percentage of tokens being traded, data from CoinGecko shows the project’s FDV is already over $60 billion.
This type of arrangement often kills early excitement. Many cryptocurrencies have seen initial price increases, followed by the release of more tokens into the market, and then a long period of declining value. People expected Hyperliquid to follow this same pattern.
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Concerns arose that a large number of HYPE tokens becoming available – nearly 10 million related to rewards for those who helped build the project – could lead to a drop in price. However, Hyperliquid started behaving more like a traditional exchange that earns revenue, rather than a typical, risky cryptocurrency. Unlike most DeFi platforms, Hyperliquid continues to see very high trading volume in perpetual futures, a growing total value locked (TVL), and substantial fee income.
Recent reports indicate Hyperliquid is performing financially more like a traditional exchange such as CME than a typical crypto project focused on token governance, even though it’s processing billions of dollars worth of perpetual futures contracts daily.
Shorts fuel the rally
A recent market rally caught many short sellers off guard. Negative funding rates, a large number of bearish bets, and excessive hype created a classic short squeeze situation. Reports from Santiment indicate that as open interest rose, short sellers were forced to buy back their positions when the price exceeded $50.
After the price of HYPE surpassed $45, it experienced a rapid increase, moving above key average levels and breaking through previous resistance. Traders started buying despite indications the price was rising too quickly, because Hyperliquid is now seen as one of the few DeFi projects consistently generating real revenue.
While recent developments are positive, I still see risk. There’s ongoing pressure to unlock tokens, and honestly, the current valuation feels quite high. After such a rapid price increase, a 20-30% correction wouldn’t surprise me. However, right now, the market seems to be betting that Hyperliquid can handle the new tokens entering circulation faster than they actually appear, and that’s what’s driving the price. Essentially, traders are willing to take the risk based on this belief.
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2026-05-24 15:25