Is HYPE Undervalued Despite Recent ETF Outflows?

Hyperliquid is seeing a cooling trend as investors pull money from its associated exchange traded funds. July marks the first month of negative flows for these products, with over 13 million dollars leaving the funds as demand shifts. This retreat coincides with a 13 percent drop in the HYPE token price, which is currently sitting about 30 percent below its record high from June.

Despite the recent sell off, Grayscale Research suggests the market is misjudging the asset. Their analysis points to the protocol generating over 1 billion dollars in cumulative revenue. By using a valuation model similar to traditional earnings per share, Grayscale argues that the protocol’s buyback mechanism supports the token price. They suggest that HYPE is trading at a significantly lower multiple compared to other major players in the fintech and crypto space.

The case for growth is also tied to how the platform is expanding beyond standard digital assets. Hyperliquid has seen a surge in volume from perpetual contracts tied to stocks, commodities, and indexes. In mid July, these traditional asset markets accounted for over half of the platform's total trading volume. This pivot allows the protocol to capture fees from global financial markets rather than relying solely on crypto speculation.

While the expansion into synthetic assets offers a new revenue stream, it also brings fresh regulatory and liquidity risks. For now, the protocol is outperforming the market's current appetite for its token. Traders will be watching closely to see if the revenue growth eventually convinces investors to return, or if the ETF outflows signal a longer period of hesitation for the HYPE token.