Arthur Hayes, the chief investment officer at Maelstrom and co-founder of BitMEX, recently made headlines when he sold 96,600 Hyperliquid (HYPE) tokens for approximately $5.1 million. This move came less than three weeks after he had expressed a bullish outlook on the asset, raising questions about his sudden change in position.
Reports surfaced over the weekend indicating that Hayes had divested his entire holding of the decentralized exchange platform’s native token, leading to speculation about his motives. Initially, Hayes claimed that the sale was motivated by a desire to purchase a Ferrari. However, Maelstrom later clarified that the decision was driven by risk management considerations rather than luxury spending.
In a statement released on Sept. 22 on X, Maelstrom highlighted several structural challenges facing the HYPE token, notably the upcoming token unlock schedule. Beginning on Nov. 29, 237.8 million tokens are set to vest linearly over a period of 24 months. This amounts to a potential supply of $11.9 billion at an average price of $50, with approximately $500 million worth of tokens being released into the market each month.
Maelstrom’s analysis revealed that Hyperliquid’s buyback mechanism could only absorb around 17% of this issuance, leaving about $410 million worth of tokens vulnerable to open-market sales on a monthly basis. Moreover, the firm expressed doubts about whether demand from digital asset treasury firms like Sonnet would be sufficient to offset the impact of the impending HYPE unlocks.
Additionally, Maelstrom pointed out that competition in the perpetual DEX space has intensified, with newer platforms like Lighter and Binance-backed Aster posing a significant challenge to Hyperliquid. Aster, in particular, has garnered support from industry heavyweights like Binance founder Changpeng Zhao and has introduced innovative features such as hidden orders and multichain support, leading to a surge in DEX volume.
In light of these developments, Maelstrom cautioned that Hyperliquid may struggle to maintain its market position amidst growing competition and changing market dynamics. Despite this, Hayes remains optimistic about the long-term potential of HYPE, suggesting that the token could still achieve a 128x gain by 2028.
As the crypto industry continues to evolve and face new challenges, it will be interesting to see how Hyperliquid adapts to these changing circumstances and whether it can sustain its growth trajectory in the face of increasing competition.