Internal leak! Why are Wall Street quant giants all-in on $HYPE? This data reveals the hardcore logic behind a 5x increase

In the quiet mountain forests of the ski season, the cable car slowly ascends. When a stranger asks about my profession, saying “I work with computers” is enough to end the conversation. Behind this, our team’s core work is traffic manipulation—turning market attention into profit, mainly by going long on $BTC and altcoins. Currently, the focus is on Hyperliquid’s $HYPE.

I rarely short because the potential gains are limited while the risks are infinite. During the phase when $BTC breaks previous highs but the overall market is difficult, finding altcoins that can absolutely rise is the key. Historical data shows that during bear markets or sideways periods, exchange tokens tend to perform the most resiliently. Even when prices decline, fee income continues and may even grow.

In early 2023, $GMX soared to $90 due to its dominance in decentralized perpetual contracts. Now, as fiat credit expansion shifts toward contraction, which exchange token can replicate that glory?

Data shows Hyperliquid is currently the top perpetual contract DEX, with revenue ranking first outside stablecoin projects. The key is that 97% of its income is used to buy back and burn $HYPE from the open market. In the entire crypto space, no other project returns such a high proportion of revenue directly to token holders.

Based on this, I set a target price of $150 for $HYPE by August 2026, about five times the current $30. Achieving this requires its 30-day annualized revenue to recover to the $1.4 billion level it reached last August.

My financial model centers on the P/E ratio and the team’s monthly token unlocks. The P/E ratio formula is: (Circulating Supply × Price) ÷ (30-day annualized revenue × Buyback ratio). The model predicts total revenue will grow from $843 million in March to $1.4 billion in August.

Hyperliquid’s advantage is that its growth does not depend on the overall increase in global crypto perpetual contract trading volume. Capturing just a small market share, such as 3.97%, can achieve the $1.4 billion annualized revenue target. For a platform that didn’t exist three years ago, this is entirely feasible.

The key products attracting users are stock perpetual contracts and binary options. Through the HIP-3 proposal, anyone can stake 500,000 $HYPE to permissionlessly launch any perpetual contract market. For example, TradeXYZ has launched perpetual contracts for silver, gold, Nasdaq 100, and S&P 500, with the precious metals market reaching hundreds of billions in daily trading volume within three months.

In a changing traditional financial regulatory environment, this has become a new price discovery venue. In just four months since launch, HIP-3 has contributed nearly 10% of Hyperliquid’s total revenue. Permissionless token listings are the holy grail for DEXs, and the rapidly growing trading volume confirms this is Hyperliquid’s key moat.

My model predicts that in the next six months, HIP-3 revenue will grow by 160%. Additionally, the upcoming HIP-4 will support permissionless creation of prediction markets, trading binary options and intraday expiry options, which could bring extra revenue growth not yet included in the current model.

Of course, competition exists. Late last year, the emergence of many low-fee DEXs depressed $HYPE’s valuation. But two key indicators give me confidence in its dominance: transaction authenticity and liquidity depth.

An objective measure of exchange quality is the ratio of daily trading volume to open interest. The lower this ratio, the more genuine the trading volume, less driven by wash trading or mining incentives. Among the top five perpetual DEXs, Hyperliquid has the lowest ratio, indicating the most authentic trading activity.

Another indicator is slippage. Comparing the order books of $BTC/USD perpetual contracts across five platforms, calculating the slippage cost for different order sizes, shows that trading large amounts on Hyperliquid generally incurs the lowest costs. Even if competitors lower fees by 1-2 basis points, large traders will prefer Hyperliquid for better execution prices.

Regarding token supply, the monthly release to the market is a key variable. This 11-member team has not taken venture funding; token sales are internally decided. After releasing nearly 20% of rewards in November and December last year, the release volume sharply dropped to about 1% in January and February this year. I speculate that initial releases covered taxes and living expenses, then the team actively reduced sales to support the price. Based on the past four months’ data, I assume an average monthly release of 815,750 tokens.

In terms of valuation, $HYPE’s current P/E ratio is about 12. Compared to traditional financial giants like CME, Robinhood, and $COIN, with P/E ratios between 26 and 40, $HYPE is undervalued. Part of this discount stems from its non-listed status, smart contract risks, and less developed trading infrastructure. But considering it has become a key price discovery venue during traditional exchanges’ off-hours, it should command a higher premium.

I use market cap rather than fully diluted valuation because this is a six-month trading cycle. The team has not indicated any new airdrops, so I do not consider the risk of large increases in circulating supply for now.

Stress testing: assume the team unlocks 9.91 million $HYPE monthly, and the market assigns a forward P/E of only 12, while revenue successfully recovers to the $1.4 billion peak. In this pessimistic scenario, the target price still reaches $58, about 75% higher than current levels. If revenue cannot grow, then $HYPE should not be bought under any circumstances.

The $HYPE/$BTC trading pair shows the market is beginning to recognize its value. After dropping to $20 in September last year, catalysts for its rise included a sharp reduction in team token releases and the expiration of competitor incentives, exposing fake liquidity.

In a macro environment that may remain sluggish, we need to find truly high-quality projects: those with real users, generating actual income, and returning profits to holders. From these perspectives, Hyperliquid is one of the best projects in crypto. After deeper research, my conviction has only strengthened. As a macro trading master once said: “Invest first, research later.” Therefore, $HYPE is now our largest liquidity altcoin holding, and we plan to continue increasing our position at current prices.

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