Crypto fund flows begin to fracture as investors exit bitcoin and ether (ETH) exchange-traded funds (ETFs) while pivoting to alternative tokens such as Hyperliquid Hype (HYPE) and XRP (XRP).
Bitcoin ETFs saw outflows of more than $1 billion last week, extending a sharp institutional pullback, while Ether funds lost another $215 million, according to data source SoSoValue. The continued hemorrhaging of the two largest assets signals a cooling appetite for broad, benchmark exposure to crypto.
But the buyouts have not been uniform.
Spot products investing in Hyperliquid’s hyped token, issued by Bitwise and 21Shares, attracted a total of $72.38 million, highlighting that capital is being accurately redeployed rather than leaving the market entirely. The XRP and sol ETFs saw inflows worth $22 million and $15.6 million, respectively.
“The broader message: Capital has not moved away from crypto uniformly. It is moving 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 popularity of the trendy ETFs, launched a week ago, coincides with a sharp rise in the token’s price and robust network activity.
The token is on a tear, rising from $38 to $63 over the past 10 days, according to CoinDesk data. It gained 59% for the month, a staggering performance compared to market leader Bitcoin’s 1% gain.
Decentralized platform Hyperliquid generated $13.2 million in fees over the past seven days, the fifth-largest total, behind stablecoin giants such as Tether and Circle Internet (CRCL) as well as Launchpad Pump. Canton Network ranks fourth, however, according to DeFiLlama, this is largely due to substantial incentives.
Hyperliquid’s revenue is expected to increase further, thanks to its recent agreement with Coinbase and Circle to integrate the stablecoin USDC as a listing asset.
Some analysts say Hyperliquid is quickly becoming a challenger to traditional trading platforms and prediction markets. And for good reason: Since the start of the war in Iran in late February, the platform’s HIP-3 market has consistently processed millions of trading volumes in perpetual futures tied to traditional, real-world assets (RWA) such as oil, gold, and U.S. stock indices.
“Hyperliquid fundamentals continue to strengthen across the board as HIP-3 markets hit new weekly highs at 2.6 billion open interest in perp RWA markets. HIP-4 launched earnings markets a few weeks ago with more modest growth,” data tracking site Artemis said in the weekly newsletter.
“Perpetual stocks, pre-IPO markets and prediction markets are all in their very early stages, and Hyperliquide is well positioned to capitalize on this momentum,” Artemis said.
