The rise of HYPE, the native token of Hyperliquid, a platform that simultaneously operates as a cryptocurrency network and a decentralized exchange for trading derivatives and perpetual futures contracts, has captured the attention of financial markets.
In this context of accelerating expansion, Matt Hogan, investment director at Bitwise, stated in a special report published on May 19th that “HYPE is one of the least valuable assets in the crypto world today.”
According to a Bitwise manager: This distortion is primarily based on two important conceptual errors regarding appreciation. By sector analysts.
“The first mistake is about classification,” Hogan said. He explained that the global financial market currently values hyperliquid highly. Simply as a permanent crypto futures platform. “However, it should be evaluated as a global super application that covers all assets, including cryptocurrencies, stocks, commodities, currencies, prediction markets, structured products, etc.,” the expert explained.
This conceptual difference completely changes the size of the market that a project aims for in the long term. The Bitwise director accurately emphasizes that “the potential world is not a $3 trillion crypto market, but a $600 trillion global asset market.” Based on this size assumption, the executive added, “These are two completely different businesses. Current pricing suggests that the second business will be priced at the first.”
Mr. Hogan’s statement They occur in a bullish situation for cryptocurrencies. On May 21st, HYPE’s price reached an all-time high of $62.68, marking an increase of 53% in the last week and 45% in the last month.
Distrust remains among market operators
The second problem identified by investment firms is psychological and technical. “The second valuation error is the anchoring error,” the analyst said. Cognitive bias that occurs when traders are bound by past experience To evaluate new assets.
“Crypto investors have been taught (painfully) for years that their tokens aren’t worth much,” Hogan says of the project’s history of growing among users while cryptocurrencies stagnated.
For such historical reasons, Market participants tend not to trust modern value capture mechanisms. “They have seen countless projects grow in users, volume, and real-world utility while their tokens stagnate, or worse. And even when they hear that HYPE is different, they don’t quite believe it. “So they mentally lump HYPE in with the Uniswap token (UNI) when it should rather be compared to Robinhood or CME stock given its 99% buyback rate,” he argued.
This progress also coincides with a moment of strong institutional traction in the United States. As reported by CriptoNoticias, two exchange-traded funds (ETFs) based on the cryptocurrency appeared on the U.S. market last week. These regulated products, issued by 21Shares and Bitwise themselves, accumulated six days of net capital inflows as of yesterday, May 20, totaling $47 million, as seen in the graph.
at the moment, Hyperliquid’s annual revenue is estimated at $800 million to $1 billionsays Hogan. With a market capitalization of $14 billion, the executive estimates that “about 10 to 14 times the buyback flow will be paid out,” an automated process in which the protocol acquires its own tokens with the proceeds. “For a fast-growing company, this is incredibly cheap,” said a Bitwise executive.
To illustrate this theory, this report compares asset valuations to publicly traded companies on Wall Street. The Robinhood company trades at a price-to-earnings ratio of 37 times, while CME Group trades at 24 times, “but neither is growing at the same rate as HyperLiquid.”
The price-to-earnings ratio is a financial metric that shows how much investors are willing to pay for each dollar of profit a company generates. A high multiple typically reflects high expectations for future growth.
Hyperliquid is the reason for the comparisons to Robinhood (a retail brokerage platform) and CME Group (the world’s largest derivatives exchange). share the same large-scale financial intermediation business model. The protocol trades at just 10-14 times earnings, making it significantly cheaper than its Wall Street peers.
Geographic restrictions can impact Hyperliquid
Despite strong corporate numbers, the project faces significant regulatory challenges to global integration.
“Hyperliquid still needs to mature. Currently (the exchange) is not available to US users and needs to be integrated into the US regulatory system. But that has not prevented it from becoming one of the fastest growing financial companies I have ever seen,” warns the expert.
Please note that there are geo-restrictions that prevent users in the United States from using this platform. Significant impact on decentralized derivatives exchangesHowever, it lacks the network infrastructure and global reach of ETFs.
“After a decade in which many projects hid their commercial nature to avoid sanctions from the U.S. Securities and Exchange Commission (SEC), the landscape for this type of digital innovation has changed.” Under the new guidance of SEC Commissioner Paul Atkins, the development was “allowed to formally operate as a true decentralized commercial operation, ending the show of worthless tokens and opaque infrastructure,” Hogan commented.
“Hyperliquid is the first big project to leverage licensing to its fullest potential,” says a Bitwise manager. Its business model is differentiated by structural financial transparency. «This product covers all asset classes. Tokens acquire real value. Earnings are real and buybacks are automatic.
At the same time, he cautioned that none of this guarantees Hyperliquid’s success, especially as competitors emerge and regulators may change course, but that “this does provide an early and reliable vision of what cryptocurrencies will look like when they are allowed to fully develop.”
For market participants, the current situation presents an unusual opportunity for pricing technology assets. The analysis concludes with a clear outlook on the cost of entry into new financial technologies: “Waiting for the future is almost always expensive; markets sometimes offer discounts.”
(Tag translation) Altcoin
