It is difficult to evaluate a phenomenon-level product rationally.

Written by: Eric, Foresight News

Last week, Trump publicly named Hyperliquid at an event at the White House, stating that CFTC Chairman Michael Selig is actively promoting this trading platform to enter the U.S. in a fully compliant manner. On the day the news broke, HYPE surged more than 20% during trading, and the momentum did not stop, with HYPE continuing to rise, surpassing $80 over the weekend, setting a new historical high. Meanwhile, HYPE's market capitalization approached $18 billion, placing it among the top ten crypto assets by market cap.

The publicly traded company Hyperliquid Strategies, which has a core strategy of holding HYPE, saw its stock price rise as much as 31% during trading on the day of the news, while traditional exchange giants Cboe and CME saw their stock prices fall in response. The market expressed its stance in the most direct way, with funds flowing from old financial infrastructures to new ones.

Looking back at the journey Hyperliquid has taken this year, every piece of news has been a milestone.

From abandoning USDH to stabilize USDC, being named twice by Bloomberg for trade.xyz, testing the waters with HIP-4 prediction markets, to establishing a Pre-IPO perpetual contract market with regulators… it is rare to see a Web3 project make such explosive moves from the start and each official announcement further expands the imaginative space.

Extreme product power comes from Hyperliquid’s extreme focus.

The most valuable proof of this focus is its ability to correct mistakes. The platform once issued its native stablecoin USDH, hoping to keep reserve earnings within the ecosystem, but seven months later, the scale of USDH remained around $100 million, while the liquidity of USDC on the platform had reached about $5 billion. Realizing that fragmented liquidity was harming the trading experience, the team decisively halted this self-incubated project, providing tens of millions of dollars in subsidies to help affected developers migrate in an orderly fashion, betting all chips back on USDC.

After shutting down USDH, Hyperliquid seemed to have opened up its potential and recognized the value of focus, thus choosing to dedicate all its efforts to gradually expanding the categories of tradable assets from cryptocurrencies to the entire world.

During the weekend when the U.S.-Iran war was raging, as traditional financial markets were closed, Hyperliquid met the demand for gold and silver trading from traders, achieving a daily trading volume of several billion dollars. Bloomberg reported on Hyperliquid twice within a week, making trade.xyz, which specifically offers price trading of non-crypto assets based on HIP-3, a star product in the Hyperliquid ecosystem. In the past two months, the daily trading volume of stock contracts on trade.xyz has frequently exceeded that of cryptocurrency trading.

In mid-October, the policy advocacy organization of the Hyperliquid ecosystem, together with trade.xyz, submitted a fifteen-page letter of opinion to the SEC, requesting the establishment of a regulatory framework for Pre-IPO perpetual contracts. These contracts only provide price exposure and do not come with equity, voting rights, or new issuance quotas, yet they allow unlisted companies to obtain market pricing around the clock.

The figures cited in the letter are quite persuasive. SpaceX opened 11% higher on its first day of trading, and Cerebras opened 89% higher, and these gaps were already marked by the perpetual market on Hyperliquid before official trading began. Hyperliquid has proven that sufficiently strong liquidity can help the market find fair prices by itself, and it has achieved the extreme when it comes to trading price, never fixated on trading the real underlying assets.

The decision to launch tokenized stocks with xStocks is merely an attempt to expand the trading variety.

In June of this year, the price of SK Hynix on Hyperliquid before the market opened on Monday had only a 1.3 thousandths gap from the actual opening price on Monday. This platform of purely trading prices disregards compliance, leverage restrictions, and other factors, showcasing the market's pricing ability in the purest manner.

Simplicity often brings miraculous effects but can also attract controversy. This year, many predicted that Hyperliquid would falter under regulation, but the reality has gone in the opposite direction. In February, the Hyperliquid Policy Center was established, with one of the most renowned policy lawyers in the crypto industry, Jake Chervinsky, serving as CEO. In July, they met with the SEC's crypto working group, and in August, they submitted the IPOP framework, unveiling a clear and rhythmic proactive communication strategy with multiple touchpoints.

On the CFTC side, Chairman Selig is not only paving the way for perpetual contracts to land in the U.S. in public, approving Kalshi's Bitcoin perpetual contracts, but has now also been named by the president to advance Hyperliquid's compliance efforts in the U.S.

The logic behind this is worth pondering. If existing trading platforms in the U.S. want to directly establish perpetual contract markets, they will face tremendous resistance from various fronts, with vested interest exchanges likely to oppose en masse. CME has even taken the CFTC to court, and state regulatory agencies are unlikely to approve easily. However, a different approach can be taken—not by adding to old platforms but by directly introducing a new species that has only perpetual contracts from day one, eliminating much of the old baggage and resulting in much less resistance.

Ultimately, the U.S. never rejects innovation; it just cannot accept innovation happening outside its borders.

From prediction markets to perpetual contracts, from the Trump administration treating the crypto industry as a core agenda, to the CFTC openly soliciting opinions on around-the-clock trading, the U.S. is further expanding the boundaries of financial trading, and Hyperliquid happens to be positioned at the spot where the boundary is being pushed open.

Hyperliquid is no longer just a simple product; it has become a phenomenon. The summer of DeFi and the NFT craze were both phenomenal, and many people missed huge gains in the 2021 bull market precisely because they tried to fit a species redefining the market into a rational valuation framework. Rational analysis can calculate cash flows but cannot predict the whims of people's hearts.

Moreover, Hyperliquid is not just about hype. Its tokenomics design includes multiple interlocking upward engines, where Dutch auctions for listing eligibility use HYPE for settlement, all entering the repurchase fund pool. The protocol continuously allocates about 97% of trading fees to buy back HYPE in the open market, with cumulative buybacks already exceeding $1.3 billion.

According to ASXN data, the quantity of HYPE repurchased and destroyed is now close to 47 million pieces, nearing 5‰ of the total.

Of course, we cannot conclude that HYPE will rise indefinitely; the continuously released tokens will increase selling pressure, and the platform's trading volume cannot sustain high growth indefinitely. The project will eventually encounter certain bottlenecks. In fact, during the recent uptrend, HYPE whales including Multicoin Capital have begun to sell HYPE through exchanges or via OTC with FalconX and Galaxy Digital.

Whether this is a planned reduction or a pessimistic sell-off about future market conditions, it warrants our vigilance. A healthy rise is never smooth sailing, and Hyperliquid still has a long way to go; there is no need to throw all its bombs at the start.

Trading is an activity that intensely stimulates human survival instincts. Many platforms are entangled in the decorum of compliance and the orthodoxy of investment, while Hyperliquid has forged a unique path in a financial market that can no longer be called a red sea but can only be described as a black sea.

There are no underlying assets, no delivery, no closing bell, only pure odds and judgments. This game is now welcoming people from all over the world to participate.