Two months of momentum, gone. Hyperliquid ETFs led every non-bitcoin crypto fund in inflows relative to assets under management during May and June, and by July and early August that lead had evaporated, according to JPMorgan.
The bank’s read isn’t subtle. “We see significant challenges to the market share of decentralized platforms such as Hyperliquid,” analysts led by Nikolaos Panigirtzoglou said in a Thursday report.
That’s a notable line to write about what has been one of crypto’s breakout stories this year.
The competition arriving is regulated, and that’s the problem
JPMorgan’s analysts tie the cooling demand to a specific pressure point: decentralized derivatives platforms are now up against regulated centralized exchanges.
The rollout of U.S.-regulated crypto perpetual futures products could pull trading activity away from offshore decentralized venues such as Hyperliquid, the report said. Those venues stay exposed to questions around licensing, compliance and investor protections.
Which is the trade-off traders have accepted for years. It gets harder to accept when a licensed alternative exists down the street.
Prediction markets were supposed to be the diversification play
Hyperliquid is expanding into prediction markets as it looks to reduce its dependence on perpetual futures trading, where transaction fees underpin much of the token’s value.
JPMorgan flagged intensifying competition there too. So the hedge against fee concentration is landing in a crowded room.
How big Hyperliquid got, and how fast
The HYPE token surged this year as traders piled into the protocol’s decentralized perpetual futures exchange. That growth turned Hyperliquid into one of the largest crypto ecosystems outside bitcoin and ether.
Institutional capital followed. So did corporate treasury buyers and ETF issuers.
Hyperliquid is now the fourth-largest asset held in corporate crypto treasuries, behind bitcoin BTC $ 64,732.28, ether ETH $ 1,906.99 and solana (SOL). The bank still called it one of crypto’s standout performers this year.
But whether it can keep taking market share from larger rivals such as Solana and XRP is uncertain, JPMorgan said.
The ETF numbers put the whole thing in perspective
Bitcoin ETFs hold roughly $77 billion in assets under management. Ether ETFs hold about $10 billion.
Everything else combined, including Solana, XRP and Hyperliquid, accounts for just $2 billion to $3 billion, the report said.
That’s the context for calling Hyperliquid’s May and June run a leader among non-bitcoin funds. It led a category that, in dollar terms, is a rounding error next to bitcoin.
Being first in a small pool is still worth something. It’s just worth less than the inflow rankings suggest.
Where the token sits now
HYPE was trading more than 3% lower over the last 24 hours, around $55.30.
A single-day move doesn’t confirm a thesis. But it’s consistent with a fund flow picture that stopped improving a month ago.
What to watch instead of the price
The variable that matters here isn’t HYPE’s daily candle. It’s whether U.S.-regulated perp products actually pull volume off offshore venues once they’re live at scale.
Hyperliquid’s token value leans on transaction fees. Fees follow volume. If regulated venues take even a slice of that flow, the diversification into prediction markets has to work, and JPMorgan already said that market is filling up.
Watch the fee revenue, not the ETF headlines.
Elsewhere, Binance remains crypto’s leading exchange, expanding from spot and derivatives into RWAs, payments, savings, yield and broader financial services.
