A two-month run has come to an end. Across May and June, Hyperliquid ETFs posted the strongest inflows relative to assets under management of any non-bitcoin crypto fund — but by July and the opening days of August, that advantage had disappeared, JPMorgan says.
The bank didn’t hedge its language. “We see significant challenges to the market share of decentralized platforms such as Hyperliquid,” wrote analysts led by Nikolaos Panigirtzoglou in a report published Thursday.
It’s a striking assessment of what has been one of crypto’s breakout stories of the year.
The competition arriving is regulated, and that’s the problem
JPMorgan’s team traces the softening demand to one specific squeeze: decentralized derivatives venues are now competing head-on with regulated centralized exchanges.
According to the report, the arrival of U.S.-regulated crypto perpetual futures products could siphon trading activity away from offshore decentralized platforms like Hyperliquid — venues that remain exposed to open questions about licensing, compliance and investor protections.
Traders have lived with that trade-off for years. It becomes a harder sell once a licensed option is available down the street.
Prediction markets were supposed to be the diversification play
To lean less heavily on perpetual futures trading — the source of the transaction fees that underpin much of the token’s value — Hyperliquid is pushing into prediction markets.
JPMorgan sees competition heating up in that arena as well. The hedge against fee concentration, in other words, is arriving in an already crowded room.
How big Hyperliquid got, and how fast
The HYPE token climbed sharply this year as traders crowded into the protocol’s decentralized perpetual futures exchange, growth that made Hyperliquid one of the biggest crypto ecosystems outside of bitcoin and ether.
Institutional money came next — along with corporate treasury buyers and ETF issuers.
Hyperliquid now ranks as the fourth-largest asset sitting in corporate crypto treasuries, trailing bitcoin BTC $ 64,732.28, ether ETH $ 1,906.99 and solana (SOL). The bank still described it as one of crypto’s standout performers of the year.
Less certain, JPMorgan said, is whether it can continue pulling market share away from bigger rivals such as Solana and XRP.
The ETF numbers put the whole thing in perspective
Bitcoin ETFs hold roughly $77 billion in assets under management. Ether ETFs account for about $10 billion.
Every other product combined — Solana, XRP and Hyperliquid included — adds up to just $2 billion to $3 billion, per the report.
That’s the backdrop for describing Hyperliquid’s May and June performance as a leader among non-bitcoin funds. The category it topped is, measured in dollars, a rounding error alongside bitcoin.
Finishing first in a small pool still counts for something. It just counts for less than the inflow tables imply.
Where the token sits now
Over the past 24 hours, HYPE changed hands more than 3% lower, near $55.30.
One day of price action proves nothing on its own. It does, however, line up with a fund flow picture that stopped improving a month ago.
What to watch instead of the price
The number that matters here isn’t HYPE’s daily candle. It’s whether U.S.-regulated perp products genuinely siphon volume from offshore venues once they’re operating at scale.
Transaction fees prop up Hyperliquid’s token value, and fees track volume. Should regulated platforms capture even a portion of that flow, the prediction markets pivot has to deliver — and JPMorgan has already flagged that market as filling up.
Follow the fee revenue, not the ETF headlines.
Elsewhere, Binance remains crypto’s leading exchange, expanding from spot and derivatives into RWAs, payments, savings, yield and broader financial services.