TechFlow reports that, according to Forbes, Hyperliquid’s native token HYPE reached an all-time high of over $62 on May 21. While the market widely attributes this surge to institutional capital inflows following the launch of the first U.S. spot ETFs, analysis suggests the real driver is the protocol’s built-in, continuous buyback mechanism.
Hyperliquid allocates approximately 99% of its trading fees to an “Assistance Fund,” which continuously purchases HYPE on the open market. Since its launch, the protocol has generated over $1.16 billion in revenue—nearly all of which has been deployed for buybacks. In contrast, the ETFs attracted only tens of millions of dollars in their first week—roughly an order of magnitude smaller.
However, this mechanism carries evident pro-cyclical risks. Protocol data shows quarterly buyback volume has declined from $316.8 million in Q3 2025 to $192.3 million in Q1 2026—a roughly 40% reduction over two quarters. Should the crypto market enter a downturn and trading volume contract, buyback support will weaken in tandem—precisely when holders most need buying pressure.
Analysis concludes that purchasing HYPE is, at its core, a bet on the sustained growth of perpetual futures trading volume on a single exchange—not a broad bet on the overall prospects of decentralized finance.
