Hyperliquid's HYPE Hits eight-month high as institutional demand builds

Hyperliquid's HYPE hit an 8-month high as institutional capital poured into newly launched spot exchange-traded funds.

The altcoin jumped to an intraday high of over $57 on Thursday, marking its highest price since September 20. 

HYPE rallies to eight-month peak amid ETF buying pressure 

HYPE has gained more than 40% over the past week, outpacing the top 100 crypto assets. At press time, the altcoin traded at $56, up nearly 16% over the past day.

Hyperliquid (HYPE) Price Performance. Source: BeInCrypto Markets

The rally is driven by strong underlying momentum. The two US-listed spot HYPE products have absorbed roughly $47.8 million in net inflows since launching last week, according to SoSoValue data. 

The 21Shares Hyperliquid ETF (THYP) went live on Nasdaq on May 12, followed by the Bitwise Hyperliquid ETF (BHYP) on the NYSE days later. Wednesday delivered the strongest session yet, with combined inflows topping $25.4 million.

“The volume growth for both of them together. Giant step increases from Day One, which is very rare. Normally big splash day one then drop off. OR oblivion for months until ppl notice it. Rare to build in first week like this,” Bloomberg analyst Eric Balchunas said.

A research analyst calculated that the two ETFs purchased 2.5 times as much HYPE as the Hyperliquid Assistance Fund burned during the first six trading days. The Assistance Fund channels roughly 97% of protocol fees into HYPE buybacks, layering fresh institutional bids on top of an existing deflationary mechanism.

“Market cap adjusted, the Hype spot ETFs attracted more flows than Bitcoin on three of the first six trading days; compared to Ethereum, the Hype products saw more inflows on five out of six days. Solana, in contrast, experienced higher market cap-adjusted flows than Hyperliquid on four of the first six trading days,” the analyst wrote.

Meanwhile, Grayscale appears to be next in line. The asset manager filed its S-1 registration statement for a spot HYPE ETF in March. 

Lookonchain reported that two wallets linked to the asset manager accumulated 510,387 HYPE worth roughly $24.95 million over the past week and staked the holdings. A third major issuer entering the market would layer additional structural buying on top of THYP and BHYP.

Futures market adds fuel to the rally

Beyond institutional flows, derivatives positioning amplified the move. Santiment observed a sharp spike in negative funding rates across exchanges. Instead, HYPE kept climbing, forcing those bearish bets to unwind and triggering a classic short squeeze that added fuel to the rally.

Open interest tells the other half of the story. The figure remains above $1.92 billion, defying the common assumption that liquidations automatically collapse open positioning. 

In HYPE's case, new traders kept entering the market even as overleveraged shorts were liquidated, keeping the futures market deeply engaged through the breakout.

With a price 3.4% from the all-time high, the next few sessions will determine whether ETF flows can fuel a fresh breakout or trigger a round of profit-taking.