Hyperliquid Dominates Bitcoin by 8x... Fund Inflow Slows Amidst Its Monopoly

▲ Hyperliquid (HYPE)/AI generated image

Hyperliquid is showing strong growth, recording an overwhelming market share in the decentralized perpetual futures market. However, it is showing a somewhat slowed trend in terms of fund inflow and open interest.

CryptoPotato, a specialized cryptocurrency media outlet, analyzed Hyperliquid (HYPE)'s performance in a report on April 26 (local time), citing the latest report from 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 is focusing on enhancing token value by utilizing 99% of its total revenue for HYPE buybacks.

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 Cap to Revenue ratio reached 47.3. This ratio rose by 67% compared to the previous quarter, approaching 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% market share. Its overall 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 around $7.6 billion. Asset price volatility and changes in market conditions influenced the decrease in open interest.

The average daily active addresses, a network activity indicator, increased by 6.6% from the previous quarter to 46,000. Ecosystem expansion has also been active, with the Hyperliquid Improvement Proposal 3 (HIP-3) framework, which allows external entities to build their own perpetual futures exchanges, showing strong growth. However, the volume of assets flowing into Hyperliquid decreased by 44% from its peak, recording $3.36 billion. A temporary stagnation in capital inflow has been observed, making future liquidity acquisition an important challenge.

In terms of tokenomics, buyback volume exceeded new issuance over the past 90 days, leading to a real reduction in issuance with 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%. Hyperliquid is focusing on solidifying its ecosystem based on its overwhelming market share and revenue structure. As the market matures, attention is drawn to whether Hyperliquid can secure long-term competitiveness.

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