Hyperliquid: The Altcoin Wall Street & AI Can't Ignore

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I understand that Mike is also working to bring hyperliquid into the United States in a fully compliant and legal fashion.

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Follow the money on hyperliquid, and it ends up with one place, the token hype. In just the last 30 days, traders paid hyperliquid about $91 million in fees. About $74 million of that went straight to buying hype token on the open market. That's a pace of roughly $900 million a year. And look at who's following that money. Wall Street is trading oil in the S&P 500, an index of 500 of America's biggest companies on hyperliquid at 3 a.m. in the morning, on a Sunday. It's buying hype through ETFs, funds that you can buy in a normal brokerage account. And America's biggest futures exchange is in a federal court fighting the new US rules for the very kind of product that hyperliquid sells. And then there's the customer we believe matters the most in this equation and cycle. The notion that AI never sleeps. So today, how the money reaches hyperliquid and why Wall Street and AI can't ignore it, or why hyperliquid could be worth a lot more than it is today in the next few years.

But first, we must talk about what is hyperliquid. It's a trading marketplace that runs its own blockchain in a public record that anyone can check. Every trade happens there in the open. Now, its main product is the perpetual futures or perps.

Say that you and a friend make a deal on oil. If the price goes up, your friend pays you the difference. But if it goes down, you end up paying your friend. Nobody touches a barrel of oil.

And a perp is that deal, run by an exchange with no end date. Regular futures and older Wall Street versions do have those. Betting up is going long, and betting down is going short. But perps brought in about 97% of hyperliquid's fees last month. Perps also come with leverage, a small deposit that controls a much bigger bet. So if you put $1,000 at five times leverage, you now control $5,000 worth of oil. Say oil rises 2%, you make $100. But if it falls 2%, you're gonna lose that $100 just as fast. Now if the losses eat too far into your deposit, the exchange closes your bet automatically. That's what they call a liquidation.

A perp isn't an option. It's where you pay upfront for the right to buy a set price. It isn't a share. A long NVIDIA perp gives you NVIDIA's price moves, not a vote or dividend. And it isn't a tokenized stock. A token backed by real shares, it's a contract that tracks a price. Now here's where Wall Street comes in. You have to picture Hyperliquid as a big marketplace where Hyperliquid itself normally decides what stalls open. This is a feature called HIP3. It lets outside builders open their own stalls, meaning they own the perpetual market. The catch here is that a builder has to lock up a half a million HIP tokens. This is acting as a security type deposit on a rental. If the stall is run badly, the validators, the computers that run Hyperliquid's blockchain, can actually vote to take that deposit. That's what they call slashing. Unlike a rental deposit, it's in HIP. So it's in dollar value, moves with the price. The biggest builder, trade.xyz, now runs stalls for the S&P 500 and 100 Stock Tech Index. Two kinds of oil, WTI and Brent, plus gold, silver, and single stocks like Nvidia. Now, over the last 30 days, stocks, stock indexes, and commodities like oil and gold traded about $60 billion on Hyperliquid. That's 24% of all of its volume, and it doesn't stop for the weekend. The S&P 500 market traded between $45 million and $100 million every Sunday last month, while the stock market was shut. Wall Street is buying the token as well. You have Bitwise, 21 shares, and Grayscale all launching US hype ETFs this spring, and all three stake their Hyperliquid more on that soon, but Bitwise alone held about 2.2 million hype tokens as of October 8th. And NASDAQ listed hyperliquid strategies says it held about 33 million hype tokens in September. It's around $2.8 billion at today's price points. And the plumbing is going in right now. Ripple Prime, Falcon X, Prime Brokers that lends to trade for big investors plugged into hyperliquid in February. Kraken's parent company says it intends to offer US clients hyperliquid to HIP3 markets, and they're going to make it happen through a regulated exchange once regulations sign off. And now, here's where the battle begins. In June, the CME, America's biggest futures exchange, sued its own regulator, the CFTC, the federal agency that actually oversees futures, to undo a new policy that opened the door for perpetuals in the United States. Hyperliquid isn't particularly part of this lawsuit, but its policy and the group that filed a written argument on the CFTC side still are battling it out. This case is still remaining open.