This guide explains what Hyperliquid is, how it works, what perpetual futures are, and how people use and buy the token today. It is designed for readers who are new to digital assets and want a clear, factual introduction.
What is Hyperliquid?
Hyperliquid is a Layer 1 blockchain purpose-built as a high-performance perpetual futures platform.
Its growth has been organic, driven by its proprietary infrastructure that quickly found product market fit, and a "community-first" approach that heavily incentivised and rewarded its early users. The decision to reject venture capital funding better aligned the direction of the founders, team and community.
It has since achieved over 40% perpetual volume market share in the decentralised exchange (DEX) landscape, and successfully competes with centralised peers such as Coinbase, OKX, Bybit and Binance. It also provides a spot trading venue but is not a major driver of adoption and valuation. In Q4 2025, Hyperliquid launched markets for tokenised assets such as equities, bonds, and commodities; and more recently in May 2026, launched prediction markets and option-like contracts too. Its goal is to become the “Everything Exchange”, whereby all assets are traded under one margined system, in a public, permissionless manner.
What are perpetual futures?
Perpetual futures (commonly called "perps") are derivative contracts that allow traders to speculate on the future price of an asset without ever owning the asset physically or worrying about an expiration date.
The concept was originally inspired by a 1990s design by economist Robert Shiller, which tied payments to real-world income streams like rents and dividends. Arthur Hayes and the BitMEX team adapted this idea by instead using borrowing rates from crypto lending markets to keep the contract price in line with Bitcoin's actual price, with an important twist: instead of relying on external borrowing rates to set the funding rate, they linked the funding rate to new far the contract price had drifted from the actual market price. Traders in 'long' positions pay those in 'short' positions, or vice versa, depending on the size of that drift. This ensures the contract price stays close to the actual market price of the asset.
The first pair launched was XBT/USD (ie BTC/USD) with 100x leverage. Today, perpetual futures are the main way traders gain exposure to crypto assets. They improve the user experience by removing the challenge of rolling expiring futures contracts They are also more capital efficient because they allow for higher leverage. Since January 2025, the trading volume for perpetual futures has typically been 5 to 12 times larger than the spot market for the BTC-USDT pair.
How big is the perpetual futures market?
In the centralised exchange market, these contracts average between $50 billion and $300 billion in daily trading volume. Within the decentralised exchange (DEX) sector, daily volumes typically range from $7 billion to $40 billion.
Since its inception, Hyperliquid has processed over $4 trillion in cumulative trading volume. It currently commands over 40% of volume market share within the decentralised perpetual futures landscape.
The total addressable market for Hyperliquid extends to traditional exchange traded derivative markets, that include the CME and CBOE, which turn over approximately $155 trillion in volume per year. By bringing these assets and their users onto the blockchain, Hyperliquid creates a unified system where all instruments can be traded using a single, cross-collateralised margin account.
What are the tokenomics?
Supply
There is a total supply of 1 billion tokens, with 254 mn circulating. Over 70% is allocated toward users. The "Genesis Event" distributed 31% (310 million tokens) at once to early participants but due to the burn there is less circulating today. The remaining user-centric supply is reserved for future emissions (38.9%) and grants (0.3%) that includes discretionary spending for ecosystem growth.
A unique selling point is that Hyperliquid never raised venture capital (VC) funding. This means there are no VC "unlocks" or "cliffs" that create sudden selling pressure. Instead, those tokens were directed to the community.
How Value Accrues to HYPE Tokens
Hyperliquid generates revenue by charging users a fee to trade. 99% of the total revenue earned is used to buy back tokens on the open market and also get burned. This creates a relationship between adoption and token value, as circulating supply decreases as the relative ownership share for remaining holders increases.
What is Hyperliquid's Opportunity?
Hyperliquid's primary growth opportunity is rooted in the ongoing structural migration of capital from centralised exchanges (CeFi) to decentralised platforms (DeFi).
As a dominant player, the platform is uniquely positioned to absorb net new capital flows as traders seek the transparency and non-custodial security of the DeFi model. Having captured a significant portion of the mindshare and volume in its peer set, Hyperliquid serves as a primary beneficiary of this rotation, which saw DeFi-to-CeFi perpetual volume ratios triple throughout 2025.
Beyond crypto-native growth, the platform aims to become "The Everything Exchange" by aggressively cannibalising market share from traditional finance (TradFi) giants like the CME. By utilising its HIP3 framework to list non-crypto assets such as equities, commodities, and bond, Hyperliquid is attracting a new demographic of TradFi-first users who benefit from a unified margin system and 24/7 trading. Capturing even a 1% share of the combined CME and 0DTE options market would represent an additional $17.4 billion in daily volume, 5% would equate to $85 billion in daily volume. Effectively scaling the platform into a global settlement layer for all asset classes.
Key Risks to Consider
Hyperliquid remains relatively centralised compared to other blockchain networks. There are currently 31 validators operating the network. A significant portion of these, approximately 77%, are located in Japan and South Korea. The Hyper Foundation also owns roughly 50% of the total staked HYPE tokens to bootstrap the security of the network. Decentralisation is not the priority for Hyperliquid, however, over time greater distribution of validators should occur. This concentration of power presents a risk of regulatory capture by governments as the network relies heavily on a small group of participants across few and close geographies, as well as a reduction in the credible neutrality of the network's consensus.
Unlike many other blockchains, decentralisation is not the primary selling point for Hyperliquid. The platform instead prioritises high performance and seamless user experience. However, the failure to achieve greater decentralisation over time could limit the platform's total addressable market and impact its long-term valuation.
Additionally, the protocol might not prevent vulnerabilities similar to past exploits, as sophisticated actors could find flaws in Hyperliquid's unique product suite and risk-management stack.
Finally, regulatory shifts pose a dual threat to growth. Mandatory KYC/AML requirements could exclude the platform's core user base, whilst the rise of large, regulated US competitors may capture institutional demand, as these investors often favour the security and familiarity of regulated environments over decentralised alternatives.
How to buy and store HYPE?
Investors can acquire HYPE through several different channels, depending on their requirements for convenience, privacy, and regulatory oversight.
To acquire HYPE, users utilise Centralized Exchanges (CEXs) for fiat on-ramps or Decentralised Exchanges (DEXs) like Hyperliquid's native order book for permissionless trading, while institutions utilise Over-the-Counter (OTC) desks to execute high-volume trades with minimal market impact.
Alternatively, Exchange-Traded Products (ETPs) allow investors to gain exposure through traditional brokerage accounts without managing blockchain infrastructure. Staking ETPs further enhance this by participating in network validation, capturing protocol rewards that are compounded directly into the product's value. There are risks, however, that include liquidity considerations, staking platform risks, custody and cyber risks and more. Although note that, unlike Hyperliquid peers, there is no slashing risk, as of current.
Once purchased, HYPE must be stored securely. The method chosen depends on whether an investor prefers direct control or professional management.
HYPE storage ranges from self-custody, where users maintain direct control via hardware or mobile wallets and multisignature setups, to institutional custody, where regulated providers manage security through professional grade hardware security modules. While self-custody offers total independence from third parties, institutional solutions provide the compliance frameworks and operational security required for large-scale asset management.
Investment Study
If you would like to learn more about Hyperliquid, Bitwise Research has published an in-depth digital asset report covering the protocol, ecosystem, and market structure in greater detail.
Please note that the report is intended for professional investors only, and retail investors should not rely on it.
Important Information
This marketing communication is provided for informational purposes only. It does not constitute investment advice, a personal recommendation, or an offer or solicitation to buy or sell any financial instrument.
This document (which may take the form of a presentation, press release, social media post, blog article, broadcast communication or similar instrument – collectively referred to as a “Document”) is issued by Bitwise Europe GmbH (“BEU” or the “Issuer”) and has been prepared in accordance with applicable laws and regulations.
BEU, incorporated under the laws of Germany, is the issuer of the Exchange Traded Products (“ETPs”) under a base prospectus and the applicable final terms, as supplemented from time to time, approved by the German Federal Financial Supervisory Authority (BaFin). The approval of the prospectus by BaFin relates solely to the completeness, coherence and comprehensibility of the prospectus in accordance with the Prospectus Regulation and does not constitute an endorsement, recommendation or assessment of the merits of the products.
BEU has issued an ETP with HYPE as the underlying asset. Readers should be aware of this interest when considering the analysis contained in this document. The base prospectus, final terms and additional risk information are available at: www.bitwiseinvestments.eu
Capital at risk. Cryptoassets are highly volatile and involve a high degree of risk. The value of investments in cryptoassets and crypto-linked ETPs may fluctuate significantly, and investors may lose part or all of their invested capital. No capital protection or guaranteed compensation mechanism applies in respect of market losses.
Important Analytical Limitations: The observations and analyses presented in this document are based on historical market patterns and data correlations which may not repeat or continue in future market conditions. Past correlations between capital flows and performance metrics are not indicative of future performance and should not be extrapolated as predictive indicators. Material downside risks remain present across all investment timeframes regardless of current undervaluation metrics or favorable technical indicators. All model outputs, fair value calculations, and quantitative assessments are subject to significant uncertainty and methodological limitations, and should not be relied upon as the sole basis for making investment decisions.
