Ethereum News Today: Hyperliquid Outage Causes 3.75% HYPE Drop and Trade Disruptions

Hyperliquid, a decentralized exchange built on its own Layer 1 blockchain, experienced a brief outage on Tuesday, causing approximately 20 minutes of downtime and trade execution issues. A representative on Hyperliquid’s Discord confirmed the service had resumed and the issue was under investigation. During the incident, the native token HYPE fell 3.75% to $43 before slightly recovering. Some community members speculated the outage might have stemmed from API malfunctions affecting the platform’s frontends, leading to price discrepancies and issues with position closures. Trading platform BasedApp, which operates on Hyperliquid, reported that order placement was disrupted but has since stabilized. Despite the technical glitch, Hyperliquid’s official status page did not report any issues, and the cause remains unclear [1].

Standard Chartered’s Geoffrey Kendrick, Global Head of Digital Assets Research, highlighted a surge in Ethereum treasury holdings, with firms accumulating 1.26 million ETH since June—nearly 1% of the total supply. He noted this growth nearly matched the inflow of 2 million ETH into Ethereum ETFs during the same period, marking a strong buying trend. Kendrick forecasted that Ethereum treasury holdings could rise tenfold to 10% of the total ETH supply, surpassing the current 4.4% share of BTC held by Bitcoin treasury companies. He attributed this potential to Ethereum’s staking rewards and DeFi access, which are inaccessible to ETFs. BitMine and SharpLink are currently leading this trend, with new entrants expected as regulatory arbitrage incentivizes more public firms to adopt ETH strategies [1].

Linea, an Ethereum Layer 2 network developed by Consensys, revealed plans to implement native ETH staking rewards, an ETH burning mechanism, and deflationary tokenomics ahead of its LINEA token launch. The project will become the first Layer 2 to burn ETH at the protocol level, with 20% of transaction fees burned and the remaining 80% used to burn LINEA tokens. An Ethereum-aligned consortium—featuring Consensys, Status, Eigen Labs, ENS Labs, and SharpLink—will control 85% of the LINEA token supply through a 10-year ecosystem fund. The remaining 15% will be allocated to the Consensys treasury, subject to a five-year lockup [1].

Senator Cynthia Lummis introduced the 21st Century Mortgage Act, proposing that Fannie Mae and Freddie Mac consider crypto as an asset in mortgage risk assessments. The bill aims to allow younger Americans to use digital assets directly in mortgage eligibility without converting them to U.S. dollars. Lummis described the initiative as a necessary modernization, emphasizing innovation and generational shifts. However, Democratic lawmakers such as Elizabeth Warren and Bernie Sanders criticized the proposal, warning that crypto’s volatility could threaten financial and housing market stability [1].

Ray Dalio, founder of Bridgewater Associates, advised investors to allocate around 15% of their portfolios to long-term assets such as gold or bitcoin to optimize risk-adjusted returns. In a CNBC interview, Dalio warned of an impending "debt doom loop" across Western economies and suggested traditional currencies would likely lose value compared to hard assets. While he preferred gold over bitcoin, he acknowledged holding a small amount of BTC and described both as "effective diversifiers" during economic crises [1].

In the next 24 hours, key economic data including Eurozone and U.S. GDP figures will be released, followed by the Federal Reserve’s interest rate decision and a U.S. FOMC press conference. Additionally, the White House is expected to release its anticipated crypto report, and EigenLayer is scheduled for a token unlock [1].

Source: [1] The Daily: HYPE fades as Hyperliquid experiences brief outage, Standard Chartered says ETH treasury firms could 10x holdings, and more (https://www.theblock.co/post/364669/the-daily-hype-fades-as-hyperliquid-experiences-brief-outage-standard-chartered-says-ethereum-treasury-firms-could-10x-holdings-to-10-of-all-eth)