Source: Finn Grant, Arkham; Translation: @金财经xz

HYPE continues to hit new all-time highs. With a market capitalization of $18 billion, in this article we will delve into the flywheel effect that has driven the coin higher during the overall market downturn.

HYPE, the native token of the Hyperliquid network, recently hit an all-time high of $75, just a few days after its last high. In the process, HYPE surpassed Dogecoin (DOGE) in market capitalization to become the ninth largest cryptocurrency by market capitalization.

All this occurred against the backdrop of an overall market downturn, with BTC and ETH continuing to fall amid an uncertain economic and geopolitical outlook.

There are many reasons why HYPE can outperform the market. The core point of this article is that strong network usage, institutional adoption, disruptive impact on traditional finance (TradFi), and the grand narrative of “super-app” have jointly created positive market sentiment around the Hyperliquid ecosystem.

Combining the above factors with the buyback mechanism of the HYPE Assistance Fund creates a positive flywheel. Below, we explore the makeup of the aid fund and the role it may play in driving HYPE's price performance.

1. What is Assistance Fund?

The assistance fund is a protocol-level repurchase mechanism. Up to 99% of the transaction fees in Hyperliquid spot and perpetual markets will be used to repurchase HYPE tokens from the open market. In the first quarter of 2026, the agreement repurchased a total of US$192.25 million worth of HYPE.

2. Diversified online income

A key component of this flywheel is the emergence of commodities, stocks and Pre-IPO contracts on Hyperliquid. These contracts mean Hyperliquid usage is growing even amid the broader crypto bear market.

Recent geopolitical instability has brought huge trading volumes to the Hyperliquid ecosystem, attracting thousands of new traders to perpetual DEX trading.

According to Grayscale research, Hyperliquid’s silver perpetual contract daily trading volume exceeded $4 billion in February. This momentum accelerated during the Middle East crisis on April 9, when 24-hour trading volume in crude oil perpetual contracts surged to over $4 billion – briefly surpassing Bitcoin perpetual contract trading volume.

As detailed in our article on crude oil perpetual contracts, huge amounts of crude oil were traded on Hyperliquid both before and after the war broke out. Because Hyperliquid supports 24/7 trading, it becomes a key venue for crude oil price discovery over the weekends—when traditional markets are completely shut down.

Since its launch, HIP‑3’s cumulative trading volume has exceeded US$275 billion, and there are currently more than 140 active trading pairs. The HYPE token itself also benefits from HIP‑3’s trading volume as the majority of transaction fees are funneled back into buybacks through the aid fund mechanism.

3. Institutional inflows and ETFs

Institutional interest provides additional momentum. Bitwise, Grayscale and 21Shares are the key institutions to absorb HYPE liquidity. Grayscale’s ETF has not yet been launched, but Grayscale is already hoarding HYPE for its launch. You can track the settlement of these funds on the chain through Arkham Intel. The screenshot below shows recent inflows into the Bitwise BHYP ETF address, which currently holds $40 million worth of HYPE.

According to data from SoSoValue, since its launch on May 12, the total net assets of the US spot HYPE ETF have reached US$122 million. This new institutional funding adds momentum to the flywheel by absorbing supply on the open market and pushing up prices, thereby attracting more traders to participate in the USDC/HYPE trading pair and increasing network liquidity.

4. Pre‑IPO Market

The ability to trade Pre-IPO stocks on Hyperliquid also drives network usage and adds more momentum to the flywheel. These markets provide diverse avenues for traders to engage in private equity speculation who would otherwise not be able to participate.

Trade.xyz is the main provider of Pre-IPO perpetual contracts on Hyperliquid. It is a decentralized perpetual DEX built on Hyperliquid Layer-1. The SpaceX perpetual contract it provides currently has an open interest of $65 million.

The Pre‑IPO perpetual contract can reflect the market’s expectations for the company’s listing price in real time. The recent listing of Cerebras shows the accuracy of this expectation.

Trade.xyz launched the Cerebras perpetual contract on May 1 with a reference price of $175. Cerebras set the IPO price at $185 on the 513th, and the opening price the next day was $350, almost twice the issue price.

The contract price on the chain is always close to the real value. Shortly before the market opened, the contract was trading around $340, only about 3% away from the opening price of $350. The IPO itself was priced at $185, meaning the perpetual contract’s pre-open mark price was closer to the stock’s actual opening price than the official offering price.

This shows that the on-chain price has always maintained an anchor to the company's market capitalization before listing. If the perpetual contracts of SpaceX, Anthropic, and OpenAI maintain the same anchoring effect, Hyperliquid will gain credibility and further strengthen its “super‑app” narrative.