On May 29, 2026, Galaxy Digital unstaked 1 million HYPE tokens in a single on-chain transaction, valued at approximately $61.16 million at the time. About 500,000 of these tokens were immediately transferred to addresses of centralized exchanges such as OKX and Bybit, and were marked by on-chain monitoring accounts as highly suspicious of being sold off. Nearly simultaneously, Onchain Lens data showed that Loracle, betting on a drop in HYPE, was facing an unrealized loss on its 5x leveraged short position that exceeded $29 million. On one side, there were whales withdrawing liquidity and tilting chips to the over-the-counter market, while on the other, highly leveraged shorts were passively squeezed in a reverse market, compounded by market sentiment described by the bulls as "extreme fear," making each on-chain transfer interpreted as a prelude to a new round of liquidation. In stark contrast, just as this game was unfolding, U.S. Treasury Secretary Scott Bessent publicly reiterated that there would be no central bank digital currency, viewing it as "the first step towards complete tracking of currency." Meanwhile, funds in the primary market were fervently betting in another direction: AI insurance platform Corgi announced it had completed $106 million in financing, with a post-money valuation of around $2.6 billion and was already profitable. Anthropic secured $65 billion in Series H funding, reinforcing the collective expectation that "AI is the new main line of capital." The short-term panic in crypto assets and the vigorous advance of AI financing overlapped in the same time slice, forming the sharpest backdrop for understanding the whale sell-off of HYPE and the emotional imbalance this round.
Unstaking of 1 million HYPE and Galaxy's sell pressure
On May 29, on-chain monitoring account lookonchain captured that Galaxy Digital completed the unstaking of 1 million HYPE tokens, valued at approximately $61.16 million based on the price at that time. Shortly after the unstaking was completed, about half of these tokens—around 500,000 HYPE—were transferred in batches to the recharge addresses of major centralized exchanges such as OKX and Bybit, creating a clear path on-chain from the staking contract to the Galaxy wallet and to the CEX deposit addresses. The unstaking and transfer to exchanges were concentrated in the same time window, and against the backdrop of high attention given to HYPE due to unlocking expectations and drastic volatility, such on-chain rhythm was almost equivalent to igniting a "potential sell pressure" red alert on the market screen.
Galaxy Digital itself is a well-established institution deeply involved in early and secondary market investments in multiple leading projects, and its actions are naturally viewed as directional hints of "smart money." Choosing to unstake in a market described as "extreme fear" and pushing large amounts of tokens toward the public market might indicate that Galaxy is actively recovering liquidity, locking in existing profits, or simply repricing the short-term risk-reward ratio of the project; to observers, it resembles a "de-risking" signal from the institutional side. Objectively, the release of 1 million HYPE tokens in a single transaction, combined with around 500,000 tokens waiting at the exchange doors ready to place orders, compelled market participants to factor "when will the whale dump" into their pricing expectations: the long side worried about the order book's capacity and began to lower psychological price levels or even take profits early, while the short side viewed Galaxy's wallet activity as a directional indicator. This string of on-chain operations by Galaxy concretized the otherwise abstract expectations of sell pressure into traceable addresses and amounts, giving the short-term trend of HYPE a psychological shadow before actual volume transactions had really taken place.
Shorts face a $29 million loss: Loracle being pressed down
While everyone focused on the Galaxy wallet counting the 1 million HYPE tokens, someone on the short side had already been pushed into the mud. Onchain Lens monitoring revealed that Loracle's 5x leveraged short position on HYPE is currently facing an unrealized loss exceeding $29 million—this means that on the same price curve, there is one side with whales thought to be "ready to dump" their spot tokens, while on the other side, there exist highly leveraged shorts betting on a downturn but being forcefully squeezed in the opposite direction, with both forces tense in the market. HYPE has recently experienced significant price volatility, with each sharp rise amplifying the profit-and-loss swings of leveraged positions; for high-leverage shorts like Loracle, if the market moves a few more percentage points unfavorably, it could transition from "deep loss" to being on the brink of forced liquidation even bankruptcy.
The issue is that the information available on-chain is not complete. We only know that this is a 5x short with a loss that has surpassed $29 million, but we cannot see its average entry price or liquidation price, nor do we know if there were batch additions, reductions, or hedges. These critical parameters are absent, and any attempt to provide an accurate estimate of the "liquidation price" is simply storytelling beyond the data boundaries. Because of these informational gaps, Galaxy's potential sell pressure became the most difficult variable to price in this game: if the tokens were really sold off significantly on the market post-unstaking, the price correction might actually provide a respite or even a turnaround opportunity for shorts like Loracle; if more was merely address-to-address maneuvering and the selling pace was much weaker than market panic expectations, high-leverage shorts would still have to endure the pressure of margin calls amidst high volatility. With potential sell-offs from major holders like Galaxy on the long side, and shorts worth tens of millions of dollars being squeezed on the short side, the asymmetrical information combined with emotional amplification made HYPE at every price level seem increasingly like a risk test on who can hold out the longest.
Panic spreads: Policy divergence amplifies HYPE volatility
On the U.S. side, Treasury Secretary Scott Bessent publicly closed the door on central bank digital currencies, stating that it is "the first step towards complete tracking of currency," and emphasized again the political consensus to "maintain the diversification of cash and private payment systems." For the crypto market, this is neither an open ticket nor a complete ban, but rather solidifies the narrative that "the dollar system continues to rely on banks and private payment networks": on one hand, the libertarian discourse against surveillance has been reignited, re-packaging crypto assets as a technological export against “fully traceable currencies”; on the other, the absence of a U.S. CBDC indicates that the traditional dollar system will not replace the function of on-chain assets, but instead, prolongs uncertainty—the regulation will not land overnight, but it will not disappear either.
Europe is taking a different route. Under the MiCA framework, there have been reports (awaiting verification) of risk warnings regarding some crypto assets or payment tools linked to the euro, compounded by analyst Serenity's sharp comment about "selling technology due to lack of money"—he mentioned that the German photonics company ficonTEC has been fully acquired by Chinese capital, but did not provide reliable price information—regulatory tightening and the outflow of key tech assets he pieced together into a picture of "Europe losing future tokens while controlling risks." This divergence between the South and North, combined with market sentiment described by bulls as "extreme fear" (specific indices still require multi-source verification), turned Galaxy's unstaking and Loracle's significant short losses into not just isolated events of a highly volatile token, but rather interpreted as a small-scale stress test under the backdrop of "regulation, capital, and technological landscape reshuffling," where any on-chain movement is more easily magnified into systematic questions regarding the sustainability of the entire crypto narrative.
AI attracts billions: Corgi and Anthropic heat up
Those watching Galaxy and Loracle on-chain find it hard not to notice the completely opposite scenery: funds are concentrating on AI at a rate far exceeding crypto. AI insurance platform Corgi just secured $106 million in funding, with a post-money valuation of around $2.6 billion, led by TCV. More strikingly, Corgi's CEO Nico Laqua publicly stated that the company achieved profitability last month, and the new round of funding will be directed towards more imaginative application scenarios such as freight, small businesses, and sports—at a time when the crypto primary market is generally contracting, this "profit first then high valuation financing" script is itself a rare premium.
On a higher dimension, Anthropic announced completing $65 billion in Series H funding, led by Altimeter Capital, Dragoneer, Greenoaks, Sequoia Capital, among others. This single round of fundraising already amounts to several times most crypto sector annual totals. Some channels even suggested that this round's post-money valuation could be as high as $965 billion (awaiting verification), an extremely distorted figure that nonetheless accurately reflects the valuation craze in the primary market for leading AI infrastructures. Between Corgi and Anthropic, one is a mid-sized company that has successfully established a business model in a segmented scenario, while the other is seen as a giant considered foundational "underlying chips" for large models; their easy jumps in fundraising scale and valuation contrast sharply with the current reality where most crypto projects are negotiating toughly and raising small sums in batches, reinforcing the mainstream narrative that "AI is the new main line, while crypto enters a cooling period."
This sharp disparity quickly reshaped the internal narrative structure in crypto: more and more projects attempt to bind their stories with AI, using terms such as "model," "intelligent agent," and "risk control algorithm" in white paper wording and pitch presentations to find new anchors for valuation. Even if the business itself is not directly related to large models, as long as there is a speculative path to AI on the PPT, it is seen as a strategy to counter the fundraising winter. Under the magnifying glass of Galaxy's unstaking and Loracle's significant short losses, the market has begun to ponder: in the future, for liquidity and emotion-intensive targets like HYPE, how much premium can an "AI narrative" ultimately yield will depend not only on the project itself but also on how much patience and risk budget funds are willing to allocate between AI and crypto.
After the whale game, where will HYPE go?
Galaxy's unstaking of 1 million HYPE and transferring about 500,000 to exchanges is an objective action that can be verified on-chain, yet whether this signifies a phase of cashing out, reallocation, or complete withdrawal remains publicly unclarified; Loracle's 5x short position on HYPE facing an unrealized loss exceeding $29 million is also clearly monitored, but whether it will face forced liquidation or choose to add to its position or close in batches is currently only speculation rather than fact. Under the counterbalance of these two forces, HYPE has roughly three potential paths ahead: one is if Galaxy continues to release tokens and emotions worsen again, triggering a chain reduction in highly leveraged longs, with the price searching for new positions through liquidation; the second is if the sell pressure is gradually absorbed by the market, and the massively losing shorts are forced to cover or even reverse position, with the market experiencing a strong rebound amidst the tug-of-war of "whale selling vs. short covering"; the third is in the context of the divergence in regulatory routes between the U.S. and Europe and overall risk appetite contraction, HYPE may be repriced as a typical high-volatility token, with valuation more dependent on liquidity structure and project fundamentals than single-day chain movements. For ordinary participants, a more critical aspect is to differentiate between "visible" and "imagined": Galaxy's unstaking, Loracle's loss scale, U.S. Treasury Secretary's denial of CBDCs, and Europe's risk warning reports under the MiCA framework (which still need multi-source verification) all have clear sources, while rumors such as "a certain institution has liquidated" or "a certain whale is preparing to pump" that cannot be verified on-chain or through official channels will only amplify the liquidation effect in extreme panic. Looking ahead to the next cycle, the substantial financing and valuation secured today by the AI sector—from Anthropic to Corgi—do not necessarily squeeze the survival space for crypto; historical trends of coexistence and rotation among multiple main threads in technology have repeatedly appeared, and the real watershed lies in which assets can provide effective risk pricing and capital vehicles at the intersection of AI and the on-chain world. Ultimately, the fate of HYPE and similar tokens will not be determined by a single whale's movements but will depend on how the on-chain data, project evolution, and global regulatory rhythms reshape their liquidity structure and narrative positions over the next few quarters.
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