ETF Inflows, Short Squeeze Push HYPE to 8-Month High

Hyperliquid’s HYPE climbed to an intraday peak above $57 on Thursday, its highest price since Sept. 20. The token traded around $56 at the time of reporting, up about 16% on the day and more than 40% over the past week.

Two U.S. spot ETFs launched last week and have drawn significant inflows. The 21Shares Hyperliquid ETF (THYP) began trading on Nasdaq on May 12 and the Bitwise Hyperliquid ETF (BHYP) started on the NYSE days later. Combined net inflows to the two funds totaled roughly $47.8 million since their launches, with Wednesday the largest single-session intake at about $25.4 million.

ETF analyst Eric Balchunas commented on the early trading volumes: “Giant step increases from Day One, which is very rare,” he noted. Both funds recorded sharp jumps in trading volume during their initial sessions.

The Hyperliquid protocol channels about 97% of its fees into buybacks of HYPE through the Hyperliquid Assistance Fund. A research analyst calculated that, in the first six trading days, the two spot ETFs bought about 2.5 times the amount of HYPE that the Assistance Fund removed from circulation.

On a market-cap-adjusted basis, the analyst found the new HYPE spot products attracted larger relative inflows than Bitcoin on three of the first six trading days and exceeded Ethereum on five of six days. Solana showed higher market-cap-adjusted flows on four of those six days.

An asset manager filed an S-1 registration earlier this year for a spot HYPE ETF. On-chain tracking identified two wallets linked to the firm that accumulated 510,387 HYPE, valued at roughly $24.95 million at recent prices, and staked those holdings in the past week.

Derivatives activity also influenced price action. On-chain data provider Santiment reported a sharp spike in negative funding rates across exchanges, indicating a build-up of short positions. As HYPE’s price rose, some of those bearish bets were unwound, producing a short squeeze. Open interest in HYPE futures remained above $1.92 billion while new long positions entered even as overleveraged shorts were liquidated.

HYPE sat about 3.4% below its all-time high at the time of reporting.