HYPE hit an all-time high of $64.23 on May 24, but new analysis suggests the rally is driven more by Hyperliquid's built-in buyback system than by ETF demand. Forbes contributor Zennon Kapron argued that the token's recent performance is tightly linked to Hyperliquid's Assistance Fund, a protocol mechanism that uses trading fee revenue to purchase HYPE on the open market.
Assistance Fund Uses 99% of Perp Fees for Buybacks
Since launch, Hyperliquid has routed over $1.16 billion in trading fees into open-market HYPE purchases, according to Kapron's report. Unlike traditional corporate buybacks, the process requires no board vote or quarterly approval. Revenue flows directly to the Assistance Fund, which then buys HYPE as part of the token model. DefiLlama's data page confirms: 99% of fees from Hyperliquid Perps and the spot order book go to the Assistance Fund for buying HYPE (excluding some builder and unit protocol fees).
This creates a steady demand stream as long as trading remains active. Higher fee generation expands the buyback pool; slower trading shrinks it.
HYPE Price Breaks $64, Weekly Gain Hits 47%
Crypto.news price data shows HYPE trading near $63.16, up 13.72% in 24 hours, with a 24-hour high of $64.21. The all-time high is listed at $64.23 on May 24. The rally pushed HYPE's market cap above $15 billion, with a fully diluted valuation above $60 billion. Seven-day gains stand at 47.28%, and 30-day gains at 53.79%.
Earlier crypto.news coverage noted HYPE broke above $60 on May 21 after a 16.15% daily gain. That report linked the move to ETF demand, DeFi-native speculation, thin float, and concentrated buying from traders and institutional products. Another report mentioned that newly launched U.S. spot ETFs attracted $54 million in cumulative inflows while also citing automated token buybacks as a contributing factor.
ETF Inflows Stand at $5.6M, Vastly Below Buyback Fund
Crypto.news reported that Bitwise's BHYP Hyperliquid ETF began trading on the NYSE on May 15 with a 0.34% sponsor fee. Bitwise will use 10% of that management fee to buy and hold HYPE on its balance sheet. Bitwise CIO Matt Hougan said: "Hyperliquid's token is explicitly designed so that rising trading activity on the Hyperliquid platform directly benefits token holders."
However, the ETF channel remains much smaller. BHYP and 21Shares' THYP have collected just $5.6 million in total net inflows since launch—far below the hundreds of millions the Assistance Fund has reportedly purchased in some quarters. Kapron's analysis centers on this scale gap: ETFs bring visibility and institutional access, but the buyback engine is a larger, more direct source of HYPE demand.
Trading Volume Remains the Key Risk
The buyback model depends on trading activity. Users generate fees on perpetuals and spot markets; those fees then fund HYPE purchases through the Assistance Fund. In active markets, the mechanism supports the token. During slow periods, fee revenue drops, and the Fund has less capital for buybacks.
Forbes highlighted this risk, noting the model works best when trading volume stays high. A market downturn could reduce fee revenue and weaken buyback support. The HYPE rally therefore tests Hyperliquid's trading engine—it has benefited from buybacks, ETF headlines, and rising interest, but its next test hinges on whether Hyperliquid can maintain enough volume to sustain the same demand cycle.