Author: Gino Matos

Translation: Deep Tide TechFlow

Deep Tide Introduction: The HYPE ETF raised $161 million within a month of its launch, with almost zero redemptions. This is not another round of altcoin speculation—investors are buying into the cash flow of the on-chain exchange Hyperliquid: a monthly trading volume of $240 billion, annual income nearing $900 million, and token buybacks funded by 99% of transaction fees. For investors and practitioners, this marks a transition in the narrative of crypto assets from "technical concepts" to "auditable business models," and signals that traditional finance is truly beginning to price on-chain protocols as if they were stocks on exchanges.

One month after THYP listed on Nasdaq, three U.S. spot HYPE ETFs have attracted $161 million in net inflows.

June 5 was the only trading day with redemptions, with BHYP seeing an outflow of $2.9 million, while every other trading day showed positive net inflow.

The clean record of fund flows partly reflects the access mechanism—Hyperliquid restricts U.S. users from accessing its platform, making the broker-listed ETF the only way for U.S. investors to hold HYPE without using non-custodial wallets.

A more sustainable driving force comes from the asset itself: a derivatives trading platform with auditable usage metrics, a fee buyback token mechanism, and a platform processing transactions worth hundreds of billions of dollars monthly.

The Business Behind the Token

According to DefiLlama data, the 30-day perpetual contract trading volume stood at $240.5 billion, $72.4 billion for the last 7 days, and $9.4 billion in the last 24 hours, with a cumulative perpetual contract trading volume of $46.63 trillion.

Currently, open interest is $8.6 billion, with annual transaction fees exceeding $1 billion, and annual income close to $886 million.

CoinGlass reported that the first quarter derivatives trading volume approached $493 billion, while DefiLlama's cumulative figure has risen to about $443 billion. The figure cited by 21Shares upon THYP's mid-May launch was $4.22 trillion.

DefiLlama's fee methodology shows that 99% of Hyperliquid's perpetual contract fees flow into a support fund for buying back HYPE tokens, excluding builder fees. The BHYP issuer Bitwise described this as "nearly all" trading revenue being recycled for open market buybacks.

This structure allows ETF issuers to promote HYPE in the same way stock analysts promote exchange stocks—higher trading volumes generate higher fees, and higher fees fund more buybacks, which tightens circulation.

BHYP's own page reported that as of June 10, it managed assets worth $93.53 million, held 1.587 million HYPE tokens, with a total staking reward rate of 2.25%, a net staking reward rate of 1.18%, and 70% of assets currently staked.

Bitwise's Chief Investment Officer Matt Hougan told CNBC that the market has "only penetrated 1% of its potential," adding that most investors still do not know what Hyperliquid is.

Presto Research's director Peter Chung observed that early data shows institutions are streaming into HYPE ETFs at a faster rate than Bitcoin ETFs, when adjusted for market cap.

The HYPE token itself peaked at $75.48 on June 2, having risen about 160% year-to-date, and is currently trading at around $61, giving the protocol a fully diluted valuation of nearly $69 billion.

Why This ETF Story is Different

The Solana ETF focuses on network activity and developer adoption, while the XRP ETF emphasizes payment utility and legal clarity.

The underlying asset offered by the HYPE ETF is a partial equity stake in the exchange cash flow engine, with visible trading volumes, open interest, fees, income, and a buyback mechanism directly linked to trading activity.

HIP-3 is Hyperliquid's permissionless framework allowing the launch of perpetual futures on any asset with price sources, which has pulled the share of cryptocurrencies in total trading volume down from about 90% to roughly 65%.

On certain days, five of the top ten assets by trading volume are now traditional markets: through S&P 500, silver, Nasdaq 100, WTI crude oil, and Brent crude oil under contracts authorized by S&P Dow Jones Indices.

Open interest in HIP-3 reached $1.7 billion in mid-May, growing over 150% since February. The largest HIP-3 deployer Trade.xyz is Hyperliquid's own tokenization division Hyperunit, accounting for $1.58 billion of the total, having processed over $100 billion in transactions since October 2025.

This revenue diversification directly reinforces the bullish logic for exchanges capturing oil, index, and silver trading volume, as it can sustain the fee operating rate.

How the Logic of Exchange Stocks Holds or Fails

If Hyperliquid's 30-day perpetual contract trading volume remains above $200 billion, maintaining annual income near the current operating rate of $885 million or climbing to $1.2 billion as 21Shares predicts in its bullish case, the bullish logic holds.

ETF inflows become a lasting third demand channel alongside organic staking and protocol buybacks, with HIP-3 open interest breaking $3 billion, and HYPE's trading resembling high-growth exchange assets rather than high-beta DeFi tokens.

The bearish scenario begins when monthly trading volume collapses below $150 billion, pulling annual income into the $350-450 million range modeled by 21Shares in its bearish case, implying token prices in the $15-19 range.

At a lower income operating rate, token unlocks could exceed buyback demand. Given the concentrated circulation of HYPE, ETF outflows would magnify price declines.

So far, the only sustained outflow trading day has not produced observable price damage, but if the scale expands tenfold, this ratio would look very different.

What Risks Are Inside the Prospectus

Bitwise's BHYP filing classifies the fund outside of the 1940 Act, noting that staking introduces risks of reduced rewards, loss of rewards, and timing risks during redemptions. 21Shares marked risks from centralization and validator attack vectors, as well as regulatory uncertainties.

Both issuers position HYPE as a speculative exposure to early-stage trading platforms, distinct from regulated exchanges.

The platform competes with centralized trading platforms that have deeper liquidity and compliance infrastructure, relying on builders' continued willingness to deploy HIP-3 markets at scale.

Hyperliquid has become a 24/7 macro trading platform, partly due to the Iran-U.S. conflict last summer that led traders to scramble for oil exposure over the weekend, while traditional futures exchanges were closed at that time.

That growth event brought the platform directly in front of commodity regulators, who have historically been quite aggressive about jurisdiction.

Law enforcement headlines targeting commodity perpetual contracts or tokenized stocks on the platform would strike at the revenue base the ETF promotion relies on.

The next test will be whether ETF inflows can be maintained as HYPE's outstanding performance this year matures and early buyers consider realizing profits.

Bitwise has committed to using 10% of BHYP's management fees for on-balance sheet purchases and staking of HYPE, which increases the structural demand floor linked to assets under management.

This, together with whether the protocol's buyback engine is sufficient to absorb future unlock-driven sell-offs, entirely depends on whether the trading volume metrics supporting this argument can continue to bear out.