Author: DLNews

Translated by: Deep Tide TechFlow

Deep Tide Overview: The DeFi exchange Hyperliquid, with a daily average derivatives trading volume of $6 billion, launched a prediction market, with the first Bitcoin contract's trading volume three times that of the combined markets of Polymarket and Kalshi. Bernstein has included prediction markets in its core research category, alongside tokenization and stablecoins, believing these tools are becoming institutional hedging tools for hedge funds—Wall Street is starting to take this $24 billion track seriously.

Hyperliquid is encroaching on the territory of Kalshi and Polymarket.

This decentralized finance exchange, handling an average of $6 billion in derivatives trading daily, launched its first result contract product last weekend—early data is impressive, says Hyunsu Jung, CEO of Hyperion DeFi.

Jung told DL News that the trading volume of its first Bitcoin result market is about three times that of the combined markets of Polymarket and Kalshi.

"This proves that the shared liquidity layer is effective in converting users," he said. "Binary markets are the obvious next step in building a complete financial stack on Hyperliquid, which dominates the crypto perpetual contract sector and has demonstrated the possibility of 24/7 real-world asset trading in the first half of 2026." Hyperion DeFi is a publicly traded American company focused on accumulating Hyperliquid’s HYPE tokens.

This launch puts Hyperliquid in direct competition with Polymarket and Kalshi—timing couldn’t be more critical, according to a report shared with DL News on Monday by Bernstein analyst Gautam Chhugani and his colleagues.

Bernstein has just expanded its digital asset research scope to include prediction markets, tracking them as one of the three major trends alongside tokenization and stablecoins, indicating Wall Street's increasing attention to the industry.

Fund Managers Are Paying Attention

Bernstein's memo places Hyperliquid's launch within a broader shift that has just begun to come into the institutional view.

Bernstein believes prediction market contracts provide a clearer way for macro-oriented funds to hedge event risk than traditional tools. Forex options or commodity exposure can lead to basis risk—asset prices may partially fluctuate before the event outcome is announced.

However, a binary contract defined as "Will the U.S. impose tariffs over 25% on EU goods by 2026?" settles based solely on the outcome; the premium, maximum loss, and yield are all known in advance, analysts say.

Kalshi was the first to take action in the institutional space. Last week, it executed its first customized commodity trade between an environmental hedge fund and Jump Trading Group through Greenlight Commodities brokerage, which was linked to the clearing price of California's May carbon credit auction. Institutional broker Clear Street also partnered with Kalshi, becoming the first to provide a regulated clearing channel for hedge funds in the prediction market.

Meanwhile, Hyperliquid’s prediction product HIP-4 directly inherits the platform’s institutional qualifications.

FalconX launched main brokerage guaranteed financing services for Hyperliquid in February, enabling cross-exchange margin trading between Binance, OKX, Bybit, and Deribit using a single collateral pool. Ripple Prime, with a clearing volume exceeding $30 trillion annually, designated Hyperliquid as its first DeFi venue that same month. Anchorage Digital, the only federally chartered crypto bank in the U.S., supports HYPE custody and staking.

Key Focus Areas

Jung stated that the milestones to track are trading volume and the growth of open contracts, as well as which markets will be added next. HIP-4 launched with Bitcoin price outcomes but is expected to expand to HYPE and Ethereum contracts, exceeding the current 15-minute timeframe.

According to Bernstein data, the combined monthly trading volume of Polymarket and Kalshi reached nearly $24 billion in April. Kalshi currently holds a 62% market share, up from 55% in January, thanks to its dominance in sports betting, which accounts for about 72% of its trading volume.

A full permissionless deployment by third-party teams is expected around mid-June—timing perfectly coincides with the FIFA World Cup, historically one of the highest volume events in prediction markets. The 2026 World Cup is already the second largest market by historical trading volume on Polymarket, reaching $884 million.