BitMEX co-founder Arthur Hayes warned that Hyperliquid's reliance on trading fees to buy back and burn its HYPE token exposes the protocol to market share losses. In an interview with Decrypt, Hayes noted that looming competition from Wall Street and established crypto exchanges like Binance threatens to erode this core value driver. While he praised Hyperliquid's role in enabling weekend price discovery for illiquid assets like oil, he stressed that sustained fee revenue is critical for the token's scarcity mechanism. Hayes had earlier predicted HYPE would reach $150 by August 2026, but just one day after the interview, he announced he had liquidated his entire HYPE position, citing expected rises in energy prices, IPOs, and AI policy shifts. HYPE traded around $59, down 14% from the prior week. Despite the sale, Hyperliquid's real-world asset perpetuals open interest reached $3 billion, with 26.6 million HYPE bought back and 579,603 burned. Hayes expects traditional exchanges to launch competing perpetual swap products by next year.

Key facts

• Arthur Hayes liquidated his entire HYPE position one day after warning about competition risks.
• Hyperliquid's token burn depends on steady trading fees, vulnerable to market share loss.
• Hayes praised Hyperliquid for enabling weekend price discovery for illiquid assets like oil.
• Hyperliquid's real-world asset perps reached $3 billion open interest with 26.6M HYPE bought back.
• Hayes expects Wall Street exchanges to launch competing perpetual swap products by next year.