The crypto bear market has dragged most major digital assets down this year, but HYPE has moved in the opposite direction. Since the start of the year, the token is up 23.9%, matching gold’s gain over the same period. The S&P 500 is slightly negative, while bitcoin fell 23.7% and ether more than 33%.
The divergence is notable not only because HYPE is crypto-native, but also because it has decoupled itself from the broader digital asset market. Its performance increasingly reflects the value of the platform behind it rather than the direction of the market.
HyperLiquid, the decentralized derivatives exchange that underpins HYPE, is designed to monetize activity rather than price appreciation. In bull markets, capital tends to focus on spot exposure. In more turbulent conditions, marked by declines and macroeconomic shocks, derivatives volume tends to persist. Traders move from buying to positioning, and the platform collects fees from both sides.
While trading volume on rival platforms Aster and Lighter has fallen in recent months, HyperLiquid’s has increased from $169 billion in December to more than $200 billion in January and February. Aster, meanwhile, fell from $177 billion in December to less than $100 billion in February, with Lighter suffering an even steeper decline, according to data from DefiLlama.
HyperLiquid’s total volume since its inception has now reached a whopping $4 trillion.
Volatility as an economic model
HyperLiquid’s main product is perpetual futures, which allow traders to go long or short with leverage. When prices rise, leverage amplifies the rise. When markets fall, short selling and basis trading take place. The exchange charges fees from both sides.
This structure becomes particularly relevant during a year marked by turbulence between asset classes. Rather than relying on sustained price appreciation, the stock market captures turnover. In stable or declining markets, traders often increase frequency, hedge exposure, or shift to relative value strategies. Business replaces management as the primary driver.
And this business model has yielded positive results. The protocol’s gross revenues increased 96% in Q3 2025 to $354 million, with the Q4 total reaching $286 million, the majority of which came from perpetual trading fees.
This revenue comes from a feather-light team of fewer than 15 employees, half of whom focus on engineering. HyperLiquid founder Jeff Yan also refused investments from venture capitalists to maintain his independence – a bold and rare approach in the crypto industry.
Trading outside market hours
More recently, HyperLiquid has expanded beyond crypto-native pairs. It now offers synthetic exposure to foreign exchange, commodities and the main equity indices. It also offers weekend trading for U.S. stocks, an innovation that resonates with retail traders accustomed to the 24-hour pace of crypto.
For a generation raised on app-based brokerage platforms, the traditional market timeline seems restrictive. As we saw last weekend, geopolitical escalations often occur outside of the usual weekday trading window. HyperLiquid’s structure allows traders to react in real time rather than waiting for Monday’s open.
HyperLiquid’s silver market has also been wildly successful, with trading volume approaching $750 million in a recent 24-hour trading period, despite traditional markets being closed for most of Sunday.
The exchange has also introduced pre-IPO perpetual markets linked to companies such as Anthropic, OpenAI and SpaceX. These instruments are synthetic and do not provide equity participation, but they provide directional exposure to private companies. In effect, they create a parallel venue for pricing among retail players who would otherwise be excluded from late-stage project evaluations.
The product FTX tried to build
The model carries within itself the echoes of a previous vision. FTX offered 24-hour trading, tokenized stocks, and transparent leverage across all asset classes. Its collapse was due to custody risk, poor balance sheet practices and commingling of funds.
HyperLiquid operates on a non-custodial framework, with on-chain settlement and transparent vault mechanics. Users interact with smart contracts rather than depositing funds into the balance sheet of a centralized entity. In a post-FTX landscape, this distinction carries weight. Retail traders who have absorbed losses from centralized bankruptcies remain susceptible to counterparty exposure.
HyperLiquid offers many of the features formerly marketed by FTX, but through an infrastructure designed to reduce reliance on a single custodian.
The exchange also relies on competition and gamification. The leaderboards rank traders based on their performance, creating protagonists like James Wynn, who lost $100 million on HyperLiquid after engaging in a high-risk, long-term trading strategy using leverage when bitcoin was above $100,000.
The mechanic encourages engagement. Traders can build their reputation through short positions, market-neutral strategies or well-timed directional bets, which creates a buzz on social media, effectively acting as a marketing vehicle even in volatile markets.
The test of centralization
Claims that HyperLiquid is immune to bear markets require context. A year ago, the protocol suffered a credibility shock that raised questions about decentralization.
As of April 2025, the total value locked in the hyperliquidity provider’s vault increased from $540 million to $150 million in one month. The trigger was a trading episode involving a token called JELLY. A trader opened a large short position in HyperLiquid while simultaneously purchasing the token on illiquid decentralized exchanges. Low liquidity has distorted price flows and put the vault in a toxic position via liquidation.
As JELLY’s reported price rose to levels not supported by significant liquidity, the vault’s unrealized losses increased. HyperLiquid intervened, forcing the market to close and setting JELLY at $0.0095 instead of the price of around $0.50 relayed by the oracles. The decision protected the vault from substantial losses, but it triggered backlash.
Critics have argued that a protocol marketed as decentralized has exercised discretionary control reminiscent of a centralized exchange. The outlook for governance deteriorated rapidly. The vault’s yield fell sharply and users withdrew their capital.
Security researchers described the episode as an economic design flaw rather than a smart contract exploit. Jan Philipp Fritsche of Oak Security called it unpriced vega risk, where leveraged exposure to volatile assets drained the risk fund in a predictable manner. The episode highlighted that economic vulnerabilities can be as destabilizing as technical bugs.
HyperLiquid then changed its governance process, moving asset delistings to an on-chain validator voting mechanism. The change did not eliminate control, but it addressed one of the main criticisms.
The vault has since recovered up to $380 million in TVL, offering users an APR of 6.93%.
Resilience through activity
Despite the controversy, trading volume on the exchange has remained robust, and with competitors Aster and Lighter losing steam, HyperLiquid is positioning itself as a mainstay in the current cryptocurrency bear market.
Risks remain. Regulatory attention could intensify around synthetic exposure to private companies and U.S. stocks. The fragmentation of liquidity in smaller markets could cause price distortions to resurface. Governance mechanisms will continue to be tested under difficult conditions.
Yet HYPE’s relative strength this year reflects a structural distinction. Rather than functioning as a high-beta bet on the appreciation of digital assets, it increasingly behaves like a claim on a venue that monetizes volatility.
In a cycle defined less by sustained recoveries than by sudden fluctuations, this positioning was important.
