In brief
Arthur Hayes warned that Hyperliquid's use of trading fees to burn tokens exposes the protocol to market share losses.
Less than two months after predicting HYPE would hit $150, BitMEX co-founder Arthur Hayes liquidated his entire position.
Despite Hyperliquid securing $3 billion in real-world asset open interest, Hayes anticipates fierce competition from Wall Street.
Hyperliquid has surfaced as crypto’s derivatives darling since it debuted in 2023, but the honeymoon may not last forever, according to BitMEX co-founder Arthur Hayes.Although the decentralized upstart’s surging popularity has helped spur its native token to recent all-time highs, the outspoken Hayes told Decrypt in an interview that looming competition from Wall Street and established crypto players threatens to erode one of the digital asset’s core drivers.Hyperliquid relies on a steady stream of trading fees to buy its token off the open market and permanently remove it from circulation—a mechanism designed to bolster scarcity, that Hayes warned, leaves the protocol uniquely exposed to any sudden loss in market share.“At the end of the day, this is a cash story,” he said. “There will be more competition in real-world asset perps, whether that’s from centralized exchanges like Binance [or] TradFi exchanges.”
