Weiss Crypto Highlights Three Major Risks for Hyperliquid and HYPE

Weiss Crypto presents a mixed view on Hyperliquid’s HYPE token. They express optimism regarding the protocol's fee-driven tokenomics but caution investors against assuming momentum signifies a lack of risk. In recent posts, the research organization pointed out HYPE's buyback-and-burn mechanism as a significant strength, while highlighting key concerns related to token unlocks, competition, and regulation.

Key Takeaways:

Weiss Crypto expresses optimism and caution regarding Hyperliquid and its HYPE token.
Three main risks have been identified: supply expansion, market structure, and regulatory issues.
HYPE’s buyback-and-burn structure is viewed positively for creating token value.
Demand for HYPE was demonstrated during recent market fluctuations, highlighting its resilience.

Hyperliquid’s Three Main Risks and Positive Outlook

Weiss Crypto provided a clear warning by stating, “However, there are certain risks associated with HYPE that investors should consider.” They identified three specific areas of concern. The first is the increase in supply due to contributor unlocks. “In April, approximately 9.92 million HYPE tokens will be released, which is relatively modest compared to the platform's trading activity.” Even a modest increase in supply is crucial for a token whose positive narrative relies heavily on a decreasing circulation.

The second risk mentioned is related to market structure. “Currently, Hyperliquid enjoys a strong first-mover advantage. Nonetheless, this does not guarantee that a formidable disruptor can't emerge.” This highlights a common issue within the crypto trading infrastructure. While early dominance can appear sustainable, particularly when liquidity, activity, and attention are interconnected, it can also attract challenges from wealthier or more aggressive competitors.

The third risk pertains to regulation. “U.S. residents are likely to remain geoblocked on the official front-end, and sector growth may be limited until regulations are clarified.” In essence, Weiss Crypto views the potential market as restricted at present—not because the product lacks demand but because access and overall sector growth are linked to unresolved regulatory issues.

The cautionary remarks were accompanied by a more optimistic perspective on HYPE itself. In a separate post featuring an infographic, Weiss noted that the token's design exemplifies "Tokenomics done right." The graphic illustrated what they called “The powerful feedback loop,” a mechanism where increasing platform activity leads to heightened trading, enhanced protocol fees, HYPE token buybacks, and reduced circulating supply.

Hyperliquid tokenomics | Source: X @WeissCrypto

A central aspect of this argument is fee deployment. The infographic indicated that “97% of trading fees are utilized to acquire HYPE tokens.” According to Weiss, this mechanism transforms platform usage into direct support for the token. As platform activity increases, “buyback accelerates,” “circulating supply decreases,” and the token’s “growth potential” rises along with its ability to attract additional user engagement.

Weiss also emphasized the scale of this mechanism, noting, “In 2025 alone, the protocol burned approximately $1 billion worth of HYPE tokens.” This figure is central to their bullish case.

In another Weiss post, the demand was illustrated during a market stress event. “On Sunday, as tensions heightened in the Middle East, Hyperliquid achieved a significant milestone by processing over $1 billion in oil-related trading volume. The reason? Traditional oil markets were inactive for the weekend, while decentralized markets operate continuously.”

This observation was paired with an earlier comment from Bitwise CIO Matt Hougan, noting that when former President Donald Trump announced military action against Iran at 2:30 AM on Sunday, U.S., European, and Asian markets were closed, while “HYPE was open.”

Ultimately, the message from Weiss is straightforward yet layered. They consider Hyperliquid a live example of how crypto infrastructure can capture trading volumes when traditional markets are not accessible, while also viewing HYPE’s fee-and-burn model as particularly robust.

At the same time, Weiss signals that even a token supported by an active buyback mechanism remains vulnerable to unlock schedules, competitive platforms, and the slower pace of U.S. regulatory developments.

As of the latest update, HYPE was trading at $37.87.

Hyperliquid price chart HYPE targets the 0.5 Fib, 1-week chart | Source: HYPEUSDT on TradingView.com