Hyperliquid ETF Outflows Send HYPE Down 13%, Grayscale Says Cheap

Investors pulled over $13 million from three exchange-traded funds tied to Hyperliquid in July, marking the first monthly net outflow since the funds launched. Fund flows reversed in the second half of July, with nearly $27 million leaving the products after a run of consecutive inflows. The three ETFs had attracted about $280 million since they began trading.

The HYPE token fell about 13% in July to roughly $54, about 30% below its mid-June peak near $76. The decline is set to be only the token’s second losing month so far this year.

Grayscale has argued that HYPE is undervalued relative to the protocol’s fee-generating model and its buyback policy. Hyperliquid reached more than $1 billion in cumulative protocol revenue within two years of launch. Most trading fees are used to repurchase HYPE, which links trading volume to token demand.

Grayscale applied an earnings-per-share framework to an “earnings per token” metric to estimate how protocol revenue could support token value. Under the firm’s assumptions, Hyperliquid could approach $1 billion in annual revenue by 2027 if trading activity recovers and new income streams grow. The firm projects between 270 million and 310 million HYPE tokens could be circulating by the end of 2027, producing estimated earnings per token of about $3.25 to $3.75. At the price levels used in Grayscale’s analysis, that implies a valuation of roughly 15 to 18 times projected earnings.

Grayscale Research Managing Director Zach Pandl wrote, “On that basis, we think it looks cheap.”

The valuation model has limits. HYPE does not represent equity in the protocol, and token holders do not receive corporate-style earnings directly. The estimate depends on sustained trading volumes, continued buybacks and the pace at which token allocations to core contributors enter the market.

Hyperliquid has expanded its markets to include perpetual contracts linked to stocks, commodities and indexes through a framework that allows third-party developers to deploy markets on its infrastructure. In a week in mid-July, perpetual contracts tied to traditional assets generated about $25.1 billion in volume, roughly 52% of the platform’s $48.2 billion weekly total. During that period the platform handled about $50 billion of roughly $79 billion in decentralized exchange perpetual-futures volume, with around $26 billion coming from traditional-asset-linked markets. Single-stock perpetuals accounted for about 61% of activity tied to traditional assets.

The shift into traditional-asset derivatives expands the protocol’s potential revenue sources beyond crypto trading. Weekly volume spikes can reflect short-term volatility, and the move into traditional-asset markets introduces regulatory, liquidity and market-structure risks that were less pronounced when the platform focused on crypto assets.

As of now, protocol activity and revenue metrics have risen while investor demand for HYPE through ETFs has weakened, producing a gap between trading-driven fundamentals and fund flows.