The recent rally of Hyperliquid’s native token HYPE has reached new heights, but the primary catalyst may not be the much-anticipated ETF launches. Instead, a closer look reveals that the protocol’s built-in buyback system is likely the dominant force behind the price action.
According to a Forbes analysis, Hyperliquid’s Assistance Fund has channeled over $1.16 billion in trading fees into open-market purchases of HYPE since its inception. This mechanism routes nearly all fee revenue—99% from perpetuals and spot trading, per DefiLlama—into buying the token, creating a consistent demand stream. Unlike traditional corporate buybacks, this process is automated and does not require board approval or quarterly planning.
This steady buyback flow has propelled HYPE to an all-time high of $64.23 on May 24, as reported by crypto.news. At the time of writing, the token trades around $63.16, boasting a 13.72% daily gain and strong weekly (47.28%) and monthly (53.79%) increases. The market cap has surged above $15 billion, with a fully diluted valuation exceeding $60 billion.
While ETF demand has played a role—particularly after Bitwise launched a HYPE ETF on May 15—the scale is modest. The ETF has attracted over $5.4 million in inflows, but this pales in comparison to the hundreds of millions directed by the Assistance Fund. The buyback engine remains the larger, more direct source of HYPE demand.
However, this mechanism is not without risk. The buyback’s effectiveness hinges on sustained trading volume. During active markets, fee revenue fuels token purchases, but a slowdown could reduce the Assistance Fund’s buying power, potentially weakening support for HYPE. The current rally thus serves as a test of Hyperliquid’s ability to maintain high trading activity.
In summary, while ETF launches have brought visibility, it is the protocol’s automated buyback that has been the primary driver of HYPE’s record run. The token’s future trajectory will depend on whether Hyperliquid can keep its trading engine running at full throttle.