- BitMEX co-founder Arthur Hayes warned that rising competition from Wall Street, Binance and traditional exchanges could undermine the fee-driven buyback model supporting Hyperliquid’s HYPE token.
- Hayes sold his entire HYPE position, a stake worth roughly US$18 million, on June 4, despite having set a price target for the token in a March essay.
- HYPE traded near US$59 after his exit, down about 14% over seven days from a recent peak above US$75.
Arthur Hayes, the co-founder of BitMEX, has cautioned that intensifying competition could threaten Hyperliquid’s HYPE token, days after he sold his entire position well short of the US$150 (AU$213) target he had publicly set for it.
In an interview with Decrypt, Hayes praised Hyperliquid’s rapid rise as a leader in on-chain perpetual-futures trading but warned of a structural vulnerability: its token value relies on a buyback program funded entirely by trading fees.
If Wall Street firms, Binance and traditional exchanges capture derivatives volume with competing products, that fee stream, and the buybacks it pays for, could weaken. “At the end of the day, this is a cash story,” Hayes stated.
Read more: Hoskinson Warns of Cardano Shakeout as Market Pressure Threatens More Ecosystem Failures
Hayes Sells Stash Over Macro Fears
Keep in mind Hayes recently sold his stash of HYPE and NEAR. He cited rising energy prices linked to the Iran conflict, a wave of upcoming artificial-intelligence IPOs and a belief that markets could peak within months, concluding it was “time to take profit.” Those are his own views rather than a forecast for the token.
He remained complimentary of the platform’s technology, calling its ability to enable weekend price discovery for illiquid assets such as oil a “watershed moment.” Hyperliquid has reached about US$3 billion in real-world-asset open interest and runs on roughly 77% gross margins.
Hyperliquid directs protocol fee revenue toward purchasing HYPE on the open market and burning it. The platform has bought back about 26.6 million HYPE, worth roughly US$1.56 billion (AU$2.22 billion) at recent prices and burned 579,603 tokens, a mechanism that has underpinned demand.
So Hayes’s concern is that the model is only as durable as the trading volume behind it.
Related: Bitcoin Slide Sparks Biggest Short-Term Holder Losses Since February
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