JPMorgan analysts have raised concerns about Hyperliquid’s growth prospects, citing stalled inflows into its exchange-traded funds (ETFs) and fierce competition from U.S.-regulated trading platforms. The firm’s token, HYPE, derives much of its value from fees generated by perpetual futures trading on the platform, which has seen reduced activity recently.
Hyperliquid’s ETF inflows peaked in May and June but have since cooled, according to data reviewed by JPMorgan. The firm noted that the launch of U.S.-regulated crypto perpetual futures products could draw liquidity away from offshore and decentralised venues, further pressuring Hyperliquid’s market position.
Nikolaos Panigirtzoglou, a JPMorgan managing director, highlighted the risks facing decentralised platforms such as Hyperliquid, including the potential for U.S.-based competitors to capture market share. He added that the firm’s ability to maintain its position in prediction markets and trading activity would be critical to its future performance.
The value of HYPE is closely tied to trading volumes, with its token currently ranked as the fourth-largest asset in corporate crypto treasuries. However, whether it can surpass Solana and XRP in market capitalisation remains uncertain, the analysts said.
The Block, which published an article on Hyperliquid in November 2023, included a disclaimer about its relationship with Foresight Ventures and Bitget, though the relevance of this to Hyperliquid’s current challenges is unclear. Analysts stressed that tracking ETF flows and market share in prediction markets would be key to assessing Hyperliquid’s outlook.
Written by Oliver Grant
Markets Desk
