Outperforming Bitcoin by 8x... 'Hyperliquid', Slowdown in Capital Inflow Amidst Dominant System

▲ Hyperliquid (HYPE)/AI Generated Image

Hyperliquid is showing strong growth, recording an overwhelming market share in the decentralized perpetual futures market. However, there has been a somewhat slowdown in terms of capital inflow and open interest.

CryptoPotato, a specialized cryptocurrency media outlet, analyzed Hyperliquid (HYPE)'s performance in its report on April 26 (local time), citing the latest report by crypto analyst Michael Nadeau. Hyperliquid generated approximately $153.8 million in fee revenue over the past 90 days. While revenue decreased by 13% compared to the previous quarter, it increased by 12.3% compared to the same period last year. Hyperliquid utilizes 99% of its total revenue for HYPE buybacks, focusing on enhancing token value.

The HYPE token surged by approximately 80% over the past 90 days, significantly outperforming Bitcoin (BTC)'s 10% increase. As investors pay more per dollar of revenue, the fully diluted market capitalization to revenue ratio reached 47.3. This ratio increased by 67% compared to the previous quarter, nearing an all-time high. This is an unusual bullish trend, rarely seen during periods of valuation contraction. Market participants are assigning a high premium to Hyperliquid's revenue-generating capability.

Hyperliquid firmly maintains its leading position in the decentralized perpetual futures exchange market, holding approximately 72% of the market share. Its total market share, including centralized exchanges, also reaches about 5%. The average daily trading volume increased by 6% compared to the previous quarter, reaching $7.07 billion. However, the open interest volume plummeted by 51% from its peak, recording approximately $7.6 billion. Asset price volatility and changes in market conditions have contributed to the decrease in open interest.

The average daily active addresses, a network activity indicator, increased by 6.6% from the last quarter to 46,000. As the ecosystem expansion became active, the Hyperliquid Improvement Proposal 3 (HIP-3) framework, which allows external entities to build their own perpetual futures exchanges, showed strong growth. However, the amount of assets flowing into Hyperliquid decreased by 44% from its peak, reaching $3.36 billion. With a temporary stagnation in capital inflow observed, securing future liquidity has emerged as a crucial challenge.

In terms of token economics, buyback volume exceeded new issuance over the past 90 days, leading to a real reduction in issuance, resulting in a decrease in net supply. Token unlock for core contributors is expected to continue until 2027. The buyback yield based on fully diluted valuation slightly decreased to 2.55%. Based on its overwhelming market share and revenue structure, Hyperliquid is focusing on strengthening the foundation of its ecosystem. As the market matures, attention is drawn to Hyperliquid's ability to secure long-term competitiveness.

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