Citrini Research, the firm that sparked massive fears of an AI bubble in February and sparked a brief market meltdown, has listed crypto exchange Hyperliquid and its token as a new “compelling” idea.
The research firm said in its report on Monday that “unlike the memetic majority of cryptos (including bitcoin), HYPE generates a legitimate cash flow. On top of that, there is even a buyback mechanism,” according to an excerpt shared on social media, which is closed by a paywalled version of the report.
Hyperliquid is a blockchain-based exchange that allows users to trade perpetual futures of crypto and other assets, such as commodities and private stocks. Its associated token, HYPE, has been one of the biggest outperformers this year, even as the rest of the digital asset sector was caught in a free fall.
The platform has generated $1.06 billion in annual fees and about $220 billion in 30-day perp volume, according to DeFiLama data
“Over 90% of the fees generated by the platform are diverted to the Assistance Fund [token buyback vehicle]which is then systematically used to buy HYPE on the open market,” the Citrini report said.
“The structure itself is attractive, but what is more astonishing is the sheer scale of the fund. Since its launch in January 2025, cumulative purchases have exceeded $2 billion,” the report added, noting that the buyback accounted for nearly half of all token buyback activity across the crypto sector last year.
Hyperliquid has emerged as the dominant player in decentralized perpetual futures trading, accounting for the majority of on-chain derivatives. HYPE’s investment thesis is increasingly linked to the exchange’s underlying business performance, however some analysts have argued that the buyback model is highly dependent on sustained trading activity and could come under pressure if derivatives volumes fall. Nevertheless, the company’s ability to generate significant revenue sets it apart from much of the crypto sector, where many token valuations are merely the result of speculation.
In addition to the company’s business model, its dominance in global markets has contributed to a broader push into perpetual futures — which have historically been off limits to U.S. traders due to regulatory restrictions — in the U.S.
The Commodity and Futures Trading Commission (CFTC) last month opened the door for certain crypto perpetual futures products to be offered under US supervision. The move has sparked a race between exchanges including Kraken and Coinbase (COIN) seeking to capture demand for a market that accounts for the majority of global crypto trading activity. While Coinbase has already expanded its perp offerings in the US, Kraken is likely to launch its product later this month.
