$HYPE Man

(Any views expressed here are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)

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Lift, glide, step.

Lift, glide, step.

Time to switch back, plant, pivot, raise, kick, plant …

Lift, glide, step.

Into the frozen forest and up the steep volcano we go. It’s just another day of ski touring meditation. Encased in the quiet of a snowy forest, my thoughts roam free. It’s amazing what you can create when your conscious focus is on putting one ski in front of the other thousands of times as you slowly ascend a volcano. I love three months of quiet.

The body and mind crave rest and recovery, which during the ski season means trips to an actual resort. On a resort day, I trade sticky skins for a mechanized chair that ferries one up hundreds of vertical meters in mere minutes. Chairlifts and gondolas are great, but sometimes I must share my silence with others.

I’m not very talkative inside a gondola. I sit quietly in the corner, but invariably there are many ski resort yahoos that enjoy striking up conversations with random strangers to pass the time.

The questions are innocuous but allow my interlocutor to place me somewhere on their social hierarchy schema. Invariably we get to the question of what I do, because it seems quite odd that I’m a ski bum who isn’t a professional guide or instructor. I respond politely but offer no meaningful information to that question with, “I do computers.” The great thing about tech jobs is everyone assumes you made some money somehow but can’t delve deeper because they barely understand how electricity works; let alone all the crazy things one can do with a “computer”. The conversation naturally tapers off from that point, and thank Lord Satoshi that it’s time to dismount and shred.

What do I or we at Maelstrom actually do? We are hype men that monetize attention. Monetization occurs by profiting from mostly long and rarely short positions in Bitcoin and various shitcoins. By bringing attention to our point of view, we believe that, on average over time, the market will validate our thesis. Right now, focus your attention on Hyperliquid (token: $HYPE).

I don’t like going short because your maximum gain is 100% unlevered and maximum loss is infinite. I strive at all times to be long convexity, not short; therefore, I’m always net long the market. In these tough times, with Bitcoin breaking decisively through its previous all-time high, is there a high-quality shitcoin that can rise in absolute terms? Yes, because in every crypto sideways or bear market, the best performing shitcoins are exchanges. Exchanges continue earning fees when prices are down, sometimes more than when prices are rising, especially if they participate in the secular growth of DEX trading volumes.^[1]

The exchange shitcoin darling of the last sideways to down market in early 2023 was GMX. GMX hit an all-time high of $90 in April 2023. Why? Because at the time it dominated the perp DEX volume leaderboards. OI and trading volumes grew rapidly, which propelled protocol revenue higher, and most importantly, a large portion of said revenue flowed to GMX token holders.^[2]

While the consensus outlook for fiat credit creation shifts from growth to contraction, what exchange token can pump?

Taken from DefiLlama on March 7th, 2026.

Hyperliquid, the dominant perp DEX, is the largest revenue-generating project that isn’t a stablecoin.^[3] 97% of this revenue is used to buy back $HYPE tokens from the market. No other project in all of crypto hands as much money back to token holders as Hyperliquid. There isn’t a Tether or Circle shitcoin that one can hold and receive a portion of their net interest margin, unfortunately. Therefore, if the market believes that $HYPE can continue syphoning volumes away from CEXs and add new features to accelerate revenue growth, then $HYPE can pump in absolute terms. My August 2026 target price for $HYPE is $150, which is roughly 5x higher than its current price of ~$30 at the time of writing this essay.

To get from Hell to Valhalla requires Hyperliquid to grow 30-day revenues to an annualized run rate of $1.4bn which it hit previously in August of last year. In order to contextualize the rest of the essay, I will start by posting the financial model below.

The key assumptions that I must validate are the P/E ratio and the monthly $HYPE team token distribution.

P/E (Price / Earnings) = (Circulating Supply * Price) / (30-day Annualized Revenue * Buyback Rate)

My model calls for an increase in revenues from HIP-3 and non-HIP-3 sources from a March total of $843m to an August total of $1.4bn. I will explain how Hyperliquid can regain its all-time high 30day annualized revenue run rate in the face of increased perp DEX competition. The last piece comes down to estimating how many $HYPE tokens the team will receive each month, using the past three months’ history of such transactions as a guide.

Sanity-checking the model under different scenarios is always useful to increase confidence that my assumptions are reasonable. I will stress a few of my assumptions to the downside to ascertain how much Kool-Aid one has to drink to believe in my $150 July price target.

CEX vs. DEX

The best thing about Hyperliquid is that to grow trading volumes doesn’t require an increase in the global trading volume of crypto perps. If a few percentage points of CEX perp volumes migrate to Hyperliquid, Hyperliquid can easily double its 30-day annualized revenue run rate in a matter of months. A 3.97% market share increase allows Hyperliquid to hit its $1.4bn 30day annualized revenue run rate. That is entirely doable, given that less than three years ago Hyperliquid didn’t exist.

It’s great that Hyperliquid can steal volume from CEXs, but what crypto derivative products will lead customers into Jeff’s loving arms?

Came for equity perps and binaries, stayed for Bitcoin, Ether, and Solana trading.

HIP-3 is the protocol that allows for permissionless listings of perps. If you stake 500,000 $HYPE tokens, you can create your own markets on whatever you like using the Hyperliquid matching and margining engine. TradeXYZ did just that, and their flagship products are perps on silver, gold, the Nasdaq 100, and the S&P 500. By the way, the silver and gold markets are less than three months old and are already trading hundreds, if not billions, of dollars per day. This is where price discovery will occur as the filthy fiat financial system changes the rules on the fly to smother the will of the people to be free of tyrannical statist money.

Screenshot taken 5 February 2026 at 11:20:00 UTC

In only four months, HIP-3 volumes account for close to 10% of total Hyperliquid revenues. Permissionless listings were always the holy grail of DEXs, and the rapid growth in trading volumes proves this is how Hyperliquid will differentiate itself from the pack. To grow Hyperliquid revenues by 66% from March to August will require HIP-3 to do the heavy lifting. This is especially true if the broader crypto market cap stays at these depressed levels. Hyperliquid must give traders something new and shiny to trade on-chain. Precious metals, AI stonks, and oil are what the plebes desire to trade. And now, using perps, anyone from around the world can trade 24/7 with higher leverage than TradFi exchanges offer. For these reasons, my model assumes HIP-3 revenue will rise 160% in six months.

The cherry on-top are prediction markets. Hyperliquid recently announced that HIP-4 will enable permissionless listing of prediction markets. I expect HIP-4 to launch within the next three months. The prediction markets that degens will turn to Hyperliquid for will be binary options and zero-day options (0DTE). It’s hard to predict how quickly revenues will ramp up pre-launch, which is why I didn’t include it in my model. Call it a bonus if the Hyperliquid team ships deliciously amazing code, as they have done in the past, that materially boosts revenues almost immediately.

Unfortunately, Hyperliquid is not the only game in town for perp DEXs. Competition is fierce because this is the next frontier of trading. The onslaught of low to no-fee perp DEXs reduced my forward multiple on Hyperliquid’s earnings late last year. What has changed since then to renew my belief that Hyperliquid’s dominance is unassailable?

真的吗? (Is it real?)

It is trivial to fake volume for a crypto CEX or DEX. At BitMEX, we used to joke about the volumizer; a program an exchange would turn on to generate fake trades to boost engagement. Many of the leading exchanges today routinely used the volumizer to claim they were the “largest” so that traders would assume that real liquidity was present. For DEXs, creating wallets to wash trade is trivial and the source of volumizing.

Liquidity farming is also a tried-and-true strategy to generate trader engagement. The DEX offers points or platform tokens based on a trader’s volume. Traders farm the token by engaging in wash trading between wallets.

Volumizing and liquidity farming do not deepen ‌real liquidity. Assessing with certainty the percentage of trading volume attributable to these activities is impossible. The only objective measure to rank exchanges against one another is to calculate the ADV/OI ratio.^[4] Because a trader must put up actual capital to margin an open position, OI tells us the degree to which real traders use the platform. ADV is easily inflated by volumizing and liquidity farming, but by deflating it by OI we arrive at a measure of organic volume driven by risk-taking traders. Therefore, the lower the ADV/OI ratio, the better.

Hyperliquid’s volumes are the most real out of the top 5 perp DEXs because its ADV/OI ratio is the lowest. As traders realize that the liquidity on these competing platforms is sometimes fugazi or the points/token farm is over, they will migrate back to Hyperliquid. Over time, Hyperliquid’s visible share of ADV will increase. This helps the narrative on $HYPE as a token impervious to competition. As many of you remember, one reason for my tactical short-term bearish stance on $HYPE was competition from low to no-fee perp DEXs. Hyperliquid is best in class in “real” volumes and as such I am no longer concerned about the competition, at least for the next six months.

The next thing to consider regarding competition is which DEX is actually the most liquid, considering execution slippage? I took a snapshot of the order books for Bitcoin/USD perps on all five platforms and calculated the slippage to execute a market buy and sell of notional $100k, $1m, and $10m.

As you can see, executing size on Hyperliquid most times is the cheapest. Therefore, even if the headline taker fee is one or two basis points lower on a competing platform, real traders will still flock to Hyperliquid as they can trade in larger sizes with minimal market impact.

I’m Rich Bitch!

The eleven-person Hyperliquid team shipped the best DEX product ever. Riches should flow to them via their ownership of locked $HYPE tokens. When Maelstrom wrote its bearish piece on $HYPE late last year, it mentioned fear surrounding the uncertainty of the total amount of tokens the team would dump into the market each month. Because Hyperliquid took no VC funding, it is really an internal political decision between Jeff and his team whether they will voluntarily decide not to sell recently vested tokens. They limited token sales.

After distributing close to 20% of awarded tokens in November and December of last year, the team distributed ~1% of awarded tokens in January and February. I imagine the high initial distributions were driven by the payment of taxes and upgrading team member’s lifestyles. With that out of the way, the team drastically reduced distributions in order to help $HYPE rebound. This is just my speculation. History doesn’t always repeat; it rhymes. In that spirit, I assumed the monthly distribution would match the average of the four months, which is 815,750.

Forward Looking

Markets are forward-looking. What will degens pay for future Hyperliquid earnings? Currently $HYPE trades at ~12 P/E. How does this stack up to TradFi exchanges:

To level set what is reasonable, I looked at the current P/E multiples for one of the largest exchanges in the world (Chicago Mercantile Exchange “CME”), the new-school cool TradFi degen broker to males with toxic masculinity (Robinhood), and the US state-captured crypto exchange (Coinbase). The P/E range is wide, from roughly 26 to 40. $HYPE trading at a 12 P/E is a steal. Part of that cheapness is because Hyperliquid is not a publicly listed stonk and therefore trades at a lower multiple because of smart contract and counterparty risk. Also, most major spot CEXs do not allow the trading of $HYPE tokens, so it is quite difficult for most to purchase. Therefore, it cannot reach asymptotic valuations like many shitcoins out there. But a P/E of 12 is ludicrously low. In a matter of a few months, Hyperliquid’s HIP-3 markets on stonk indices and precious metals became the price discovery mechanism for the weekends when TradFi exchanges like the CME are closed. I didn’t know computers needed to go to the golf course on the weekends. At a minimum, given the tides of change, $HYPE should sport a P/E roughly equal to that of the CME. Because I wanted my price target to be a number ending in a 0 or 5, I goal seeked the P/E given all my other assumptions to 25.2. The market will give $HYPE a higher P/E multiple as the platform revenue retakes its all-time high in the midst of broader crypto price weakness.

A note on market capitalization vs. FDV.^[5] I use the market capitalization which is lower than FDV because of the different circulating supplies. Market capitalizations use the currently circulating tokens, not some future end state like FDV. Given that this is a six-month trade, using the current market capitalization is appropriate. Yes, Hyperliquid could announce another airdrop, which could increase the circulating supply. Given that the Hyperliquid team hasn’t intimated an airdrop is imminent, I will ignore this risk and supply shock.

Sanity Check

Let’s stress the model to incorporate situations that terrify us.

What if the team receives 9,910,000 $HYPE tokens each month, the market only pays 12x for forward earnings, but Hyperliquid regains its all-time high of $1.4bn 30day annualized revenues?

The target price drops to $58 which is ~75% above the current price of $30. Not bad.

The reason I didn’t stress revenues downwards is that if Hyperliquid cannot grow revenues from here, the token won’t rise. If that’s your view, don’t buy $HYPE under any scenario.

$HYPE Man

Source: CoinGecko

I charted $HYPE/BTC because I want to show that the market woke up to the token’s value. As we all painfully know, unless you were short, Bitcoin fell dramatically since September of last year when $HYPE reached its ATH of almost $60. $HYPE reached a local low of ~$20 a few weeks ago. I believe the catalyst for the resumption of $HYPE’s ascent is the reduction of team token distributions from a headline 9,910,000 for the month of January to a paltry 140,000. In addition, as various points and token incentives sunset at competing perp DEXs, their attractiveness to traders quickly waned. What remains may or may not be real volume, but as I showed earlier, Hyperliquid is the cheapest place to trade based on orderbook liquidity.

At Maelstrom, we dipped our toes in the water in the mid $20’s. On the skin track, I thought to myself if the macro is figgity fucked for a while, what can I buy? What is the highest quality project that has real users, paying real money, and giving that money back to token holders? Hyperliquid is the highest quality project in all of crypto across these metrics. The act of researching and writing this essay increased my conviction. As the macro god himself Druckenmiller says, “Invest first, investigate later”. Therefore, $HYPE quickly became our largest liquid shitcoin position, and we intend to continue selling all other inferior projects to own more $HYPE while within this trading range.

Pay attention, bitches, to the $HYPE man!

P.S. Don’t be a bitch boi Kyle Samani and let’s bet!

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^[1] DEX - Decentralized Exchange

^[2] OI - Open Interest

^[3] Perp - Perpetual Swap, read my essay “Adapt or Die” about the genesis of this ground breaking financial innovation

^[4] ADV/OI - Average Daily Trading Volume / Open Interest

^[5] FDV - Fully Diluted Valuation