Introduction
In a striking divergence from a declining broader crypto market, Hyperliquid’s HYPE token has surged over 40% in the past two weeks. This rally is not driven by speculative hype, analysts argue, but by two concrete fundamental developments: a landmark institutional partnership with Ripple and a drastic 88% reduction in monthly token supply unlocks that slashed sell-side pressure. While these moves strengthen the project’s long-term narrative, near-term retail sentiment shows signs of caution.
Key Points
- Ripple Prime integrated Hyperliquid's DEX—its first direct DeFi partnership since launching in November 2025—providing institutional access and validation.
- February's token unlock was reduced from 1.2 million to 140,000 HYPE (88% cut), removing ~$34M in monthly sell pressure and supporting price stability.
- HIP-3 upgrade already enables commodities/equities trading, while upcoming HIP-4 will add prediction markets and USDH-denominated trading, expanding utility.
A Rally Built on Fundamentals, Not Hype
While major cryptocurrencies like Bitcoin (BTC) have trended lower over the past fortnight, Hyperliquid’s HYPE token has posted a defiant 41.5% rally, currently trading around $31.53. Analysts are quick to attribute this performance to underlying utility and structural changes rather than market-wide sentiment. “Hyperliquid is holding because it’s built on usage, not hype,” said Nima Beni, founder of Bitlease. He framed the current market environment as an “extinction phase,” where capital is rotating away from narrative-driven tokens and toward platforms with demonstrable utility during periods of tightening liquidity.
This fundamental case is supported by Hyperliquid’s robust derivatives infrastructure and recent platform upgrades. The HIP-3 upgrade has already expanded the exchange’s reach by introducing non-crypto markets, including commodities and equities, driving new trading volume. Looking ahead, Ryan Lee, chief analyst at Bitget, points to the upcoming HIP-4 upgrade—which will introduce outcome-based prediction markets and USDH-denominated trading—as a key future catalyst for growth and adoption.
Twin Catalysts: Institutional Validation and Reduced Sell Pressure
The rally was ignited by two simultaneous announcements. First, Ripple added Hyperliquid’s decentralized exchange (DEX) to its institutional prime brokerage platform, Ripple Prime. This marks Ripple’s first direct integration of a DeFi venue on its U.S.-focused platform since its launch in November 2025, providing a significant stamp of institutional validation and access. “The Ripple Prime announcement has clearly added momentum,” Lee told Decrypt, though he noted it explains “only part of the move.”
A potentially more impactful driver was a radical shift in Hyperliquid’s tokenomics. A January 29 announcement revealed that the monthly token unlock for February would be slashed to 140,000 HYPE, an 88% reduction from January’s 1.2 million unlock. This drastic cut has fundamentally altered the supply-demand dynamic. Jonatan Randin, senior market analyst at PrimeXBT, told Decrypt this move removed roughly $34 million in monthly sell pressure from the market. Lee argues this allowed the market to price in “broader platform growth,” enabling HYPE’s price to decouple from Bitcoin’s recent decline.
Strong Narrative Meets Near-Term Caution
The combination of institutional partnership, reduced inflation, and a growing ecosystem of specialized tools is reinforcing a powerful long-term narrative for Hyperliquid. Lee highlighted that this ecosystem is driving adoption, revenue growth, and ongoing HYPE token burns, creating a virtuous cycle. The project’s focus on real-world utility in derivatives and expanding asset classes positions it as a survivor in what Beni calls the end of the “era of thousands of indistinguishable tokens.”
Despite these strong fundamentals, retail trader sentiment appears to be wavering in the short term. Data from the prediction market Myriad, owned by Decrypt’s parent company Dastan, shows a shift in expectations. Users now assign only a 38% chance that Hyperliquid will retest the $41 level, down 10 percentage points from 48% just last Friday. This growing near-term caution suggests that while the project’s foundational story is strengthening, the immediate path for the HYPE token price may face headwinds as the market digests its recent rapid gains.
📎 Related coverage from: decrypt.co
