Hyperliquid (HYPE) has emerged as one of the most liquid trading venues in the crypto market and is attracting increasing interest from hedge funds and institutional investors as capital rotates away from bitcoin and ether, according to Joshua Lim, global head of markets at FalconX.
The decentralized derivatives exchange, which launched its HYPE token last year, has become a major source of trading activity for FalconX clients. Lim said demand for Hyperliquid products has grown as investors search for opportunities beyond the major cryptocurrencies.
“For things like HYPE, where there is broad consensus that it is an allocable asset, there is plenty of liquidity. It is not difficult to trade it,” Lim said in an interview. “HYPE is probably more active than Ethereum for us some days.”
The comments come as bitcoin and ether (ETH) have struggled to attract new inflows as investors focus on a smaller group of alternative cryptoassets. Lim said FalconX expects major cryptocurrencies to remain in range over the next few months due to macroeconomic uncertainty, ETF outflows and competition from other speculative investments.
“What that translates to is actually implied volatility, so the price of options is near all-time lows,” Lim said. “People don’t think bitcoin and ether are going to move very much.”
Instead, traders have moved into assets linked to emerging themes such as artificial intelligence (AI) and decentralized trading infrastructure.
“Altcoins move a lot,” Lim said. “That’s where the speculative money is going. It’s about things like HYPE and Zcash (ZEC) and Venice (VVV). AI-associated tokens are doing very well.”
Hyperliquid’s appeal extends beyond its token. Lim said hedge funds are increasingly using the platform’s derivatives products because they provide access to markets that are difficult or impossible to trade elsewhere.
“They’re very good at launching things early,” he said, pointing to Hyperliquid’s pre-IPO perpetual contracts tied to companies like SpaceX. “We have hedge funds that there is no other way to trade in a liquid way.”
The growing interest in Hyperliquid reflects a broader push that crypto-native trading infrastructure can expand beyond digital assets. The platform generated around $800 million in revenue by 2025 and has been steadily expanding its product range from crypto perpetual futures to tokenized stocks, commodities and predictive markets.
Grayscale has argued that Hyperliquid’s long-term significance may lie less in the HYPE token itself and more in its potential to act as a 24/7 trading venue for a wide range of financial assets. Regulatory developments remain a key uncertainty, particularly as the platform currently limits US users, but supporters increasingly see Hyperliquid as a test case for how blockchain-based markets can compete with traditional exchanges in the future.
