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JPMorgan Sees Cooling Demand for Hyperliquid ETFs

JPMorgan points to growing competition from regulated derivatives and softer inflows into HYPE products. Prediction markets and offshore venues like Hyperliquid are also facing more pressure.

By Mike Hesp
• 2 min read
JPMorgan Sees Cooling Demand for Hyperliquid ETFs

Key Takeaways

  • JPMorgan says inflows into Hyperliquid ETFs almost completely stalled after May and June.
  • The bank sees more competition from regulated crypto products and larger centralized exchanges.
  • Hyperliquid still matters, but JPMorgan says other crypto ETFs remain much smaller than Bitcoin and Ethereum.

Inflows into Hyperliquid ETFs have nearly dried up after the strong runs in May and June, according to JPMorgan. The bank says the slowdown reflects both rising competition and growing questions about where decentralized trading platforms fit in a market that is maturing quickly.

Inflows Slow Down

JPMorgan said Hyperliquid was still one of the standout names in May and June among non-Bitcoin crypto ETFs when measured by inflows relative to assets under management. But that momentum faded in July and early August. Analysts led by Nikolaos Panigirtzoglou wrote that they see “significant challenges” ahead for decentralized platforms such as Hyperliquid.

Hyperliquid became one of crypto’s biggest stories this year as traders rushed into the decentralized perpetual futures platform. The HYPE token rode that wave and also attracted institutional capital, treasury buyers, and ETF issuers. The bigger question now is whether that growth can continue as larger competitors keep closing the gap.

More Pressure From Regulated Products

The bank said the slowdown is happening as decentralized derivatives platforms face tougher competition from regulated centralized exchanges. JPMorgan also pointed to the launch of U.S.-regulated crypto perpetual futures products, which could pull trading activity away from offshore decentralized venues like Hyperliquid.

That shift affects more than just market share. It also feeds into the broader debate around licenses, compliance, and investor protection. Hyperliquid runs on its own Layer-1 blockchain, HyperCore, which is designed for fast order matching and onchain trading. JPMorgan noted that the project already has a major role in onchain perpetual futures, but said the market is expanding and the competition is getting tougher.

What This Means for Europe

For European crypto readers, the takeaway is how fast derivatives and ETF flows can change once regulated products enter the picture. The broader point matters outside the U.S. too, where more attention is going to which trading venues attract the most volume and which rules govern that activity.

JPMorgan also flagged rising competition in prediction markets, a segment Hyperliquid is trying to build out so it is less reliant on perpetual futures fees. The bank contrasted that with Bitcoin and Ethereum, which still dominate the ETF landscape with about $77 billion (€66.6 billion) and $10 billion (€8.7 billion) in assets under management, respectively. ETFs tied to other crypto assets, including Solana, XRP, and Hyperliquid, still total only about $2 billion (€1.7 billion) to $3 billion (€2.6 billion) combined, according to the bank. HYPE was down more than 3 percent over the past 24 hours, trading around $55.30 (€48).

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