Major crypto asset management firm Bitwise is bullish on decentralized perpetual trading platform Hyperliquid’s HYPE token, calling it one of crypto’s most undervalued assets. Bitwise CIO Matt Hougan dubbed Hyperliquid a financial trading “super-app.”
Market is mispricing Hyperliquid, Bitwise says
On Tuesday, Hougan shared his opinion on the leading perpetual contracts trading avenue Hyperliquid, saying that investors are still treating it as a crypto-native derivatives exchange instead of a broader financial “super-app.”
Hougan added that the market is currently making two critical errors when trying to value Hyperliquid. First, it is the underestimation of the platform’s total addressable market (TAM).
Secondly, it’s the failure to truly understand how Hyperliquid’s token captures value from activity on the trading platform. Over the past 24 hours, the token is up more than 8 percent, trading at $48.25 at press time.
Although Hyperliquid started its journey as a decentralized perpetuals trading platform focusing on digital assets, it has recently expanded its service suite across a range of asset classes – including equities, commodities, and prediction markets.
As a result, Hyperliquid has entered the ranks of Robinhood and other major financial trading platforms in terms of reported trading volume and user interest. The Bitwise CIO posited that Hyperliquid generates somewhere between $800M to $1B in annualized revenue.
At the same time, the platform trades at around 10-14 times its buyback stream. This is much better than other platforms such as Robinhood and CME Group which command a significantly higher trade value despite slower growth.
Hougan bullish on HYPE tokenomics
Continuing, Hougan stated that Hyperliquid represents a new generation of crypto projects that directly accrue value for their token holders.
Notably, 99 percent of revenue generated by the platform is used to buy back the token from the open market, creating enormous buy pressure.
Bitwise added that favorable U.S. regulations are also helping platforms like Hyperliquid. The U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins recently mentioned financial “super-apps” that can provide multiple asset classes under one platform.
On May 14, Hyperliquid inked a partnership with the leading U.S.-based crypto exchange Coinbase, replacing its native USDH stablecoin with the exchange’s USDC stablecoin.
Hyperliquid also saw its first ever spot exchange-traded fund (ETF) go live on Nasdaq on May 13. However, the demand for the financial product has been relatively lukewarm.