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Protocol Buybacks, Not ETFs, Propel HYPE to Record Prices

Analysts say Hyperliquid’s automatic fee-funded buybacks are the main force behind HYPE’s rise, making the token vulnerable to drops in trading volume.

Overview

  • Hyperliquid has routed roughly $1.16 billion in cumulative trading fees into open‑market HYPE purchases through an Assistance Fund that runs continuously and cannot be paused by governance.
  • DefiLlama and reporting show the Assistance Fund receives about 97–99% of trading fees and buys HYPE block by block, so buyback size moves with platform revenue.
  • U.S. spot HYPE ETFs and institutional flows added tens of millions of dollars and publicity but remain small compared with the protocol’s cumulative buybacks.
  • Quarterly buybacks fell from about $316.8 million in Q3 2025 to $192.3 million in Q1 2026 even as HYPE set record highs, creating a growing gap between prices and fee‑funded support.
  • Analysts warn the model is fragile because buybacks depend on trading volume—especially perpetual futures—and upcoming token unlocks plus concentrated holdings could swell selling pressure if volume weakens.