The crypto bear market has dragged down most major digital assets this year, but HYPE has moved in the opposite direction. Year-to-date, the token is up 23.9%, matching gold’s gain over the same period. The S&P 500 is slightly negative, while bitcoin is down 23.7% and ether more than 33%.
The divergence is notable not only because HYPE is crypto-native, but because it has been decoupled from the broader digital asset market. Its performance increasingly reflects the value of the platform behind it rather than the direction of the market.
HyperLiquid, the decentralized derivatives exchange that powers HYPE, is built to monetize activity rather than price appreciation. In bull markets, capital tends to concentrate in spot exposure. Under chopper conditions characterized by write-downs and macro shocks, derivatives volume tends to persist. Traders switch from buying to positioning and the platform charges fees on both sides.
While trading volume on rival platforms Aster and Lighter has fallen in recent months, HyperLiquids has soared, rising from $169 billion in December to more than $200 billion for both January and February. Aster, meanwhile, went from $177 billion in December to less than $100 billion in February, with Lighter suffering an even sharper drop, DefiLlama data shows.
Total volume on HyperLiquid since inception has now hit a whopping $4 trillion.
Volatility as a business model
HyperLiquid’s core product is perpetual futures, which allow traders to go long or short with leverage. As prices rise higher, leverage amplifies the upside. When markets slide, shorting and basis trades come into play. The exchange charges fees on both sides.
That structure becomes particularly relevant in a year characterized by turbulence across asset classes. Instead of relying on sustained price increases, the exchange captures turnover. In sideways or falling markets, traders often increase frequency, hedge exposure or rotate to relative value strategies. Activity replaces direction as the primary driver.
And that business model has produced positive results. Gross protocol revenue grew 96% in Q3 2025 to $354 million, with the fourth quarter total reaching $286 million, the majority of which came from perpetual trading fees.
This revenue comes from a super lean team of fewer than 15 employees, half of whom are focused on technology. HyperLiquid founder Jeff Yan has also refused investment from venture capitalists to maintain independence – a bold approach uncommon in the crypto industry.
Trading outside market hours
Recently, HyperLiquid has expanded beyond crypto-native pairs. It now offers synthetic exposure to foreign currencies, commodities and major stock indices. It also provides weekend trading for US stocks, an innovation that resonates with retailers accustomed to crypto’s circadian rhythm.
For a generation raised on app-based brokerage platforms, the traditional market calendar feels restrictive. As seen over the past weekend, geopolitical escalations often land outside the typical weekday trading window. HyperLiquid’s structure allows traders to react in real time rather than waiting for Monday’s open.
HyperLiquid’s silver market has also been a roaring success, with trading volume of nearly $750 million over a recent 24-hour trading period despite traditional markets being closed for most of Sunday.
The exchange has also introduced pre-IPO perpetual markets linked to companies such as Anthropic, OpenAI and SpaceX. These instruments are synthetic and do not provide equity ownership, but they do offer directional exposure to private companies. In effect, they create a parallel venue for price discovery among retail participants otherwise excluded from late-stage venture valuations.
The product FTX tried to build
The model echoes an earlier vision. FTX pitched 24-hour trading, tokenized stocks and seamless leverage across asset classes. Its collapse was due to depository risk, shoddy balance sheet practices and commingling of funds.
HyperLiquid operates on a non-custodial framework, with on-chain settlement and transparent vault mechanics. Users interact with smart contracts instead of depositing funds into a centralized entity’s balance. In a post-FTX landscape, this distinction carries weight. Retailers that absorbed losses from centralized failures remain sensitive to counterparty exposure.
HyperLiquid delivers many of the features once marketed by FTX, but through infrastructure designed to reduce reliance on a single custodian.
The exchange also leans into competition and gamification. Leaderboards rank traders prominently by performance, creating protagonists like James Wynn, who lost $100 million on HyperLiquid after engaging in a high-risk, long-only trading strategy using leverage when bitcoin was above $100,000.
The mechanic encourages engagement. Traders can build reputation through short positions, market neutral strategies or well-timed directional bets, and it creates a buzz on social media – and works effectively as a marketing tool even in volatile markets.
The centralization test
Claims that HyperLiquid is insulated from bear markets require context. A year ago, the protocol faced a credibility shock that raised questions about decentralization.
In April 2025, the total value locked in the Hyperliquidity Provider box dropped from $540 million to $150 million within a month. The trigger was a trading episode involving a token called JELLY. A trader opened a large short position on HyperLiquid while simultaneously buying the token on illiquid decentralized exchanges. Thin liquidity distorted price feeds and forced the box into a toxic position via liquidation.
As JELLY’s reported price rose to levels not supported by deep liquidity, the box’s unrealized losses increased. HyperLiquid intervened, forcibly closing the market and fixing JELLY at $0.0095 instead of the price of around $0.50 that was being relayed by oracles. The decision protected the vault from significant losses, but it ignited a backlash.
Critics argued that a protocol marketed as decentralized had exercised discretionary control reminiscent of a centralized exchange. Governance optics deteriorated rapidly. The yield on the vault fell sharply and the users withdrew capital.
Security researchers described the episode as an economic design flaw rather than a smart contract exploit. Jan Philipp Fritsche of Oak Security characterized it as unpriced vega risk, where leveraged exposure to volatile assets drained the hedge fund in a predictable manner. The episode underscored that financial vulnerabilities can be as destabilizing as technical failures.
HyperLiquid later changed its governance process and moved asset delistings to an on-chain validator voting mechanism. The change did not remove controls, but it addressed one of the key points of criticism.
The vault has since recovered to $380 million in TVL, giving users an APR of 6.93%.
Resilience through activity
Despite the controversy, trading volume on the exchange remained robust, and with competitors Aster and Lighter losing momentum, HyperLiquid is positioning itself as a mainstay in the ongoing cryptocurrency bear market.
There are still risks. Regulatory attention may intensify around synthetic exposure to private companies and US stocks. Liquidity fragmentation in thinner markets can re-create price distortions. Control mechanisms will continue to be tested under stress.
Still, HYPE’s relative strength this year reflects a structural difference. Instead of acting as a high-beta bet on the valuation of digital assets, it is increasingly behaving like a claim on a gaming venue that monetizes volatility.
In a cycle defined less by sustained rallies and more by sharp swings, this positioning has mattered.
