Hyperliquid Unlocks Significant HYPE Token Allocation
The team behind the Hyperliquid Decentralized Exchange (DEX) has unlocked 1.75 million HYPE tokens, designated for developers and core contributors. At the time of the announcement, this allocation was valued at over $60.4 million. This release was a pre-planned event, part of the project’s established vesting schedule and had been publicly disclosed in advance.
A pseudonymous developer, iliensinc, marked the occasion by highlighting the first anniversary of Hyperliquid’s token generation event and its widely discussed airdrop. He reminded users that the initial launch involved the release of approximately 270 million tokens on November 29, 2024, a distribution he described as the "largest airdrop in history, measured in today's market value at about $9.5 billion." He also emphasized a key point frequently raised by Hyperliquid supporters: the absence of investor unlocks, stating that "Hyperliquid never raised any external capital." Despite the transparency surrounding the vesting schedule, the HYPE token experienced a decline of roughly 4.6% following the release on Saturday, indicating market concerns about potential selling pressure from the newly unlocked tokens.
Investor Takeaway
Although the token unlock was known in advance, its substantial size and specific timing hold significance for a token that has been experiencing a downward trend for several months. Traders are closely observing whether any portion of the $60 million allocation will enter the market liquidity in the upcoming days.
Market Concerns Regarding Selling Pressure on HYPE
Arthur Hayes, founder of BitMEX, provided a candid perspective on the inherent risks associated with team token unlocks, writing that "Even if the team pinky swears to not sell, there is nothing holding them to that." He further suggested that token holders should anticipate "a non-zero chance of daily selling pressure," a factor he believes the market has already incorporated into its valuation.
HYPE reached its all-time high of approximately $59.40 in September, but has since depreciated by around 42%. The token has consistently traded below its 200-day moving average, losing a critical support area amid broader market volatility that has impacted altcoins. Price action analysis reveals a significant climb through mid-2025, followed by a sharp reversal commencing on September 19. This decline intensified during the sharp sell-off on October 10, a period when numerous tokens experienced intraday losses of up to 95%. HYPE saw a plunge of approximately 54% within that single trading session before recovering to the $40 range within two days. Since then, a pattern of lower highs and diminishing momentum has kept the token under pressure. This environment makes any new token unlocks particularly sensitive for traders seeking indicators of potential supply flows.
Hyperliquid's Launch: A Departure From Industry Norms
Hyperliquid's debut was recognized as a significant development due to its decision to forgo a venture-capital-backed funding model. Instead of allocating a substantial portion of its token supply to investors, the project prioritized distributing the majority of tokens to its user base, developers, and early community members. This strategic approach has influenced subsequent projects that have adopted similar broad distribution models to mitigate the risks associated with concentrated ownership structures.
The launch also occurred during a period when cryptocurrency projects faced increased scrutiny regarding early investor allocations, vesting cliff periods, and the impact of venture capital-controlled supply on token markets. Hyperliquid's model aimed to circumvent these challenges by ensuring that token supply remained predominantly in the hands of users rather than investment funds. The recent unlock continues this established structure, with tokens being released exclusively to internal contributors, rather than external investment firms.
Hyperliquid's Performance Amidst Market Turbulence
Industry executives and market commentators have highlighted Hyperliquid's strong revenue generation and technical performance as key strengths, even as the HYPE token's price chart reflects the broader pressures experienced by altcoins. The DEX has managed an impressive monthly trading volume of approximately $330 billion, operating with a relatively small development team. This operational efficiency is particularly noteworthy during a year characterized by significant volatility and recurrent liquidity crises.
Supporters contend that the DEX's high throughput, consistent user growth, and substantial fee generation provide a clear rationale for its robust valuation during its airdrop and initial trading phases. Conversely, critics argue that unlock cycles will continue to exert influence on short-term price movements, irrespective of fundamental performance metrics. At present, the market is evaluating both perspectives: the increasing supply resulting from the vesting schedule and the project's capacity to sustain trading activity without relying on the fundraising structures commonly adopted by other major platforms.
Investor Takeaway
The coming weeks will be crucial in determining whether the market perceives this unlock as a routine event or as a new catalyst for downward price pressure. While Hyperliquid's long-term success is contingent on its user engagement and revenue generation, the immediate price trajectory will largely depend on supply dynamics.