Grayscale Says Hyperliquid Could Become a DeFi Juggernaut

HYPE is trading near record highs, as the protocol has routed $1.16Bn into token buybacks, and spot Hyperliquid exchange-traded funds have just logged a strong market debut, with Grayscale taking note.

That is the backdrop against which Grayscale Research published its May 27 report, ‘Hyperliquid Breaks the Mold’, positioning Hyperliquid as one of the clearest DeFi breakout candidates in the current cycle.

This dominance from Hyperliquid comes as the HYPE token trades at $57.10, down -7.8% in the past 24 hours, though it is only -11% away from its all-time high of $64.40 on May 26.

What Grayscale Actually Said About Hyperliquid

Grayscale Research, the research arm of one of crypto’s largest institutional asset managers, laid out a direct thesis: Hyperliquid is building exchange-scale infrastructure on-chain, and its HYPE token gives markets a mechanism to price that growth.

The report’s framing was deliberate: Grayscale stated that “the HYPE token is not a stock, but it can be roughly compared to traditional equities in related industries,” drawing on traditional exchange business models to anchor valuation discussion without overstating the legal equivalence.

The central claim was unambiguous: “If it continues to execute well, retain and grow its dedicated community, and benefit from regulatory changes that open a path to broader adoption, we think Hyperliquid could become a financial services juggernaut.”

Grayscale also filed an S-1 with the US SEC for a spot Hyperliquid ETF under the proposed ticker GHYP, with Anchorage Digital Bank named as custodian following an amendment that replaced Coinbase Custody, a change analysts read as improving the filing’s regulatory profile ahead of any SEC response.

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Institutional Validation Is Re-Rating DeFi Risk Premium

Grayscale endorsements signal that a protocol has passed institutional due diligence, influencing retail sentiment and giving traders a credible narrative anchor. This is evident in HYPE’s price action, which reflects DeFi momentum ahead of recent reports.

The DeFi risk premium is shifting as institutional and political validation re-rates these premiums. Hyperliquid is at the forefront of on-chain derivatives and spot ETF expansions. Structured research from firms like Grayscale helps bridge the credibility gap that keeps institutions cautious.

Arthur Hayes, BitMEX co-founder, added to this dynamic by trading 115,453 HYPE worth $6.33M on Bybit, selling at an average of $54.81, and later buying back 85,714 HYPE at $62.69. Hayes advocates for HYPE to reach $150, aligning with Grayscale’s institutional perspectives and using its data points to inform traders.

The DeFi Juggernaut Case Is Grounded in Product Traction

(SOURCE: TradingView)

The institutional thesis has tangible product-market fit. Hyperliquid quietly launched its on-chain perpetuals exchange in 2023 and began pulling significant liquidity from dYdX and GMX in late 2024.

By early 2025, it was widely recognized as the largest on-chain perps venue by open interest and trading activity, at times accounting for over 50% of on-chain derivatives open interest measured against its closest competitors.

The $1.16 billion routed into HYPE buybacks is not a marketing figure; it is a protocol mechanic. Hyperliquid ties trading fee revenue directly to token demand through its buyback structure, which means exchange usage and token value are architecturally linked rather than narratively connected.

That kind of fee-to-token loop is what the Grayscale traditional exchange comparison points to: real usage generating real protocol revenue that flows back into the asset.

A large whale short position unwinding in May added further weight to the derivatives activity picture, intensifying focus on HYPE liquidity at exactly the moment institutional coverage arrived.

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