Citrini Research, the influential firm that triggered a brief AI stock meltdown in February by warning of an artificial intelligence bubble, has turned its attention to crypto. In a report released Monday, the firm named decentralized exchange Hyperliquid and its native token HYPE as a "compelling" new idea.
Cash Flow and Buyback Model
The report states that HYPE generates legitimate cash flow, unlike the memetic majority of crypto (bitcoin included). According to DeFiLlama, Hyperliquid's platform has generated $1.06 billion in annualized fees and approximately $220 billion in 30-day perpetual volume. Over 90% of the fees are redirected into an Assistance Fund, which systematically buys HYPE on the open market. Cumulative purchases have surpassed $2 billion since the fund's launch in January 2025. "The structure in itself is attractive, but what's more astonishing is the pure scale of the Fund," the report added, noting that the buyback accounted for nearly half of all token-buyback activities across the crypto sector last year.
Dominant Player in On-Chain Perps
Hyperliquid has emerged as the dominant player in decentralized perpetual futures trading, accounting for the majority of on-chain derivatives volume. HYPE's investment thesis is increasingly tied to the exchange's underlying business performance. However, some analysts argue that the buyback model depends heavily on sustained trading activity and could face pressure if derivatives volumes decline. Still, Hyperliquid's ability to generate substantial revenue sets it apart from much of the crypto sector, where valuations are often driven by speculation.
U.S. Regulatory Shift Sparks Race
The exchange's global dominance has also fueled a broader push into perpetual futures in the U.S., a market historically restricted for American traders due to regulatory constraints. Last month, the Commodity and Futures Trading Commission (CFTC) opened the door for certain crypto perpetual futures products under U.S. oversight. This move has triggered a race among exchanges, including Kraken and Coinbase (COIN), to capture demand for a market that represents the majority of global crypto trading activity. Coinbase has already expanded its perp offerings in the U.S., while Kraken is expected to launch its product later this month.
As regulatory and competitive dynamics shift, Hyperliquid's ability to maintain its on-chain dominance amid incursions from traditional heavyweights will be a key watchpoint.