Bitwise Asset Management’s chief investment officer, Matt Hougan, has publicly stated that Hyperliquid is undervalued, even as its native token HYPE has climbed 77% year-to-date. The remark from a top crypto fund executive adds weight to ongoing debate about the project’s true market worth.
Why Hougan sees room to run
Hougan did not provide a specific price target or valuation model, but his assessment hinges on what he calls the “buyback model” that Hyperliquid uses. Under that structure, the platform regularly repurchases HYPE tokens from the open market using a portion of its trading fees, effectively reducing supply and supporting price. Hougan argues that the mechanism creates a “direct link between protocol revenue and token value” that many investors overlook.
Hyperliquid is a decentralized exchange built on its own Layer‑1 blockchain. It focuses on perpetual futures trading and has attracted a loyal user base thanks to low fees and fast execution. The buyback program is designed to distribute value back to token holders without requiring staking or governance votes.
The 77% run and what it means
HYPE’s 77% gain this year has outpaced most major cryptocurrencies, including Bitcoin and Ethereum, which have posted more modest returns over the same period. Despite that rally, Hougan believes the token still trades below what its fundamentals justify. He pointed to the project’s revenue per token and the consistent buyback schedule as key metrics that are not fully reflected in the current price.
Critics might argue that Hyperliquid’s total value locked remains small compared to established DeFi giants like Uniswap or Aave, but supporters counter that the buyback model makes HYPE more like a revenue‑sharing stock than a typical utility token. The debate comes down to whether investors are pricing in future growth or discounting the platform’s relatively short track record.
How the buyback model works
Hyperliquid’s buyback mechanism is embedded in its smart contracts. Every week, a portion of the exchange’s fee revenue is used to purchase HYPE from the open market. Those tokens are then sent to a burn address, permanently removing them from circulation. The process is automated and transparent — anyone can verify the buyback transactions on‑chain.
The approach differs from many DeFi protocols that distribute fees to liquidity providers or stakers. By burning tokens, Hyperliquid aims to create deflationary pressure while avoiding the complexity of reward pools. Hougan described the model as “elegant” and said it aligns the interests of the protocol and long‑term holders.
Still, the buyback’s effectiveness depends on sustained trading volume. If activity on Hyperliquid declines, the buyback budget shrinks, and the deflationary effect weakens. The platform has seen steady growth in daily volume since its launch, but it operates in a fiercely competitive sector.
What’s next for Hyperliquid
Hougan’s endorsement may attract more institutional attention, but the project faces the same regulatory uncertainty that hangs over the entire crypto space. Hyperliquid’s team has not announced any major upgrades or partnerships since the buyback program went live. For now, the market will watch whether HYPE can hold its gains and whether the buyback model continues to deliver the value that its CIO backer sees.
