Institutional Bet Drives Hyperliquid's Scarcity Play to New Heights

Hyperliquid (HYPE) reached a new all-time high of $51.07, driven by robust protocol buybacks, whale purchases, and increasing institutional interest. The token is currently trading near $50.8, with a 12% gain in the last 24 hours. Key to this surge has been the protocol's buyback program, which has allocated 97% of its trading fees—approximately $1.26 billion annualized—toward repurchasing HYPE tokens. As a result, nearly 29 million HYPE tokens have been removed from circulation, accounting for 8.7% of the current supply. The scarcity effect is further amplified by the fact that only one-third of the total supply is currently in the market.

The recent price action has been supported by significant whale activity. On August 17, a major investor spent 19.38 million USDC to acquire HYPE, increasing open interest and signaling strong bullish sentiment among leveraged traders. Institutional adoption is also playing a critical role, as HyperEVM’s custody solution with BitGo offers a secure entry point for institutional investors, reinforcing Hyperliquid’s credibility and positioning it as a serious competitor to centralized exchanges.

Fundamental performance has been equally impressive. Over the past month, Hyperliquid has generated nearly $100 million in fees, with $28 million recorded in the last two weeks alone. This indicates a strong revenue trajectory and growing market share within the decentralized derivatives space. The platform’s hybrid infrastructure—combining the speed of centralized exchanges with the transparency of decentralized systems—has demonstrated resilience under high trading volume, further attracting institutional capital.

Technical indicators also support a bullish outlook. The RSI is at 58.80, suggesting a transition from a neutral to a bullish trend, while the DMI indicates that buyers are currently in control. However, the ADX at 19.22 suggests that while a trend is forming, it remains moderate. Traders are advised to monitor for stronger directional momentum before committing to breakout strategies. The price is currently consolidating in an ascending triangle, and a successful break above $51 could lead to price targets of $55, $57, and $60 based on Fibonacci extensions.

Looking ahead, Hyperliquid’s WLFI derivatives strategy has further boosted HYPE’s price. The launch of the 3x WLFI-USD perpetual contract on August 23 led to a record $29 billion in 24-hour trading volume and significant institutional participation. The WLFI contract, which allows traders to leverage their exposure without holding the underlying tokens, has become a liquidity magnet ahead of WLFI’s token generation event (TGE) on September 1. Institutional capital is expected to flow into Hyperliquid ahead of major exchange listings for WLFI, which may include Binance and Coinbase.

The WLFI TGE has also created opportunities for arbitrage and speculative trading, as volatility is expected to rise significantly in the pre-TGE period. Hyperliquid’s technical infrastructure has proven its capacity to handle such increased activity, maintaining low slippage and downtime despite the surge in leveraged positions. The platform’s integration with Oracle has been instrumental in aligning the 3x contract with WLFI’s valuation models, ensuring price stability and attracting further institutional interest.

The tokenomics of Hyperliquid are also benefiting from the WLFI trading surge. At current trading volumes, an additional $340,000 in monthly token destruction is expected after the TGE. Combined with the already burned 28.5 million HYPE tokens, the platform continues to drive a deflationary trend that supports long-term value retention. With a 75% share of the decentralized perpetuals market—up from dYdX’s previous dominance—Hyperliquid is solidifying its position as a leading player in the DeFi derivatives ecosystem.

Source: [1] HYPE Surges to New ATH of $51: Bullish Run or Market Exhaustion? (https://www.xt.com/en/blog/post/hype-surges-to-new-ath-of-51-bullish-run-or-market-exhaustion) [2] Bulls Eye $50 Breakout as Revenues and Buybacks Fuel Demand (https://bravenewcoin.com/insights/hyperliquid-hype-price-prediction-bulls-eye-50-breakout-as-revenues-and-buybacks-fuel-demand) [3] Hyperliquid's WLFI Derivatives Strategy Drives HYPE Token to 4% Gains Amid Pre-TGE Trading Frenzy (https://www.fxleaders.com/news/2025/08/25/hyperliquids-wlfi-derivatives-strategy-drives-hype-token-to-4-gains-amid-pre-tge-trading-frenzy/)