Crypto fund flows are starting to break and investors are leaving bitcoin and ether (ETH) exchange-traded funds (ETFs), while rotating to alternative tokens such as Hyperliquid’s hype (HYPE) and XRP (XRP).
Bitcoin ETFs saw more than $1 billion in outflows last week, extending a sharp institutional pullback, while ether funds lost another $215 million, according to data source SoSoValue. The continued bleeding from the two largest assets signals a cooling appetite for broad benchmark crypto exposure.
But the redemptions have not been uniform.
Spot products investing in Hyperliquid’s hype token, issued by Bitwise and 21Shares, attracted a combined $72.38 million, underscoring that capital is being reallocated with precision rather than exiting the market altogether. XRP and sol ETFs recorded inflows worth $22 million and $15.6 million, respectively.
“The broader message: Capital hasn’t left crypto uniformly. It’s rotating toward newer narratives and away from crowded large-cap exposure,” Timothy Misir, head of research at BRN, said in an email.
The hype is real
The strong uptake for hype ETFs, which went live a week ago, coincides with a sharp rise in the token’s price and robust network activity.
The token has been on a tear, rising from $38 to $63 in the past 10 days, CoinDesk data shows. It’s up 59% for the month, a staggering performance compared to market leader bitcoin’s 1% gain.
Decentralized platform Hyperliquid has generated $13.2 million in fees over the past seven days, the fifth-largest figure, followed by stablecoin behemoths such as Tether and Circle Internet (CRCL), as well as launchpad Pump. Canton Network is in fourth place, but according to DeFiLlama, that is largely driven by significant incentives.
Hyperliquid’s revenue is expected to increase further, thanks to their recent agreement with Coinbase and Circle to integrate stablecoin USDC as an offering asset.
Some analysts say Hyperliquid is quickly emerging as a challenger to traditional trading platforms and prediction markets. And for good reason: since the Iran war began in late February, the platform’s HIP-3 market has consistently handled millions in trading volume in perpetual futures linked to traditional and real assets (RWA) such as oil, gold and US stock indices.
“Hyperliquid fundamental metrics continue to strengthen across the board as HIP-3 markets hit new weekly highs of 2.6B in open interest across RWA perp markets. HIP-4 launched exit markets a few weeks ago to more modest growth,” data tracking website Artemis said in its weekly newsletter.
“Equity perpetuals, pre-IPO markets and prediction markets are all in the very early innings and Hyperliquid is well positioned to capitalize on that momentum,” Artemis said.
