Hyperliquid news

The SEC's Crypto Task Force held a direct meeting with representatives from Hyperliquid Policy Center, trade.xyz, and Sullivan & Cromwell LLP to discuss regulatory approaches for crypto assets and decentralized perpetual markets. Attendees included Hyperliquid founder Jeff Yan and policy center CEO Jake Chervinsky. The talks reflect growing regulatory interest in high-performance onchain markets that operate continuously. $HYPE responded positively to the news, trading near $65. The discussion could influence future guidance on decentralized trading infrastructure as regulators work toward practical frameworks.

JPMorgan warned that Hyperliquid's new arrangement with Circle and Coinbase threatens the economics of Circle's USDC stablecoin, creating a 'prisoner's dilemma' that incentivizes competition over distribution at the expense of each other's revenue. Under the deal, Coinbase classifies USDC on Hyperliquid as 'on-platform,' paying 90% of reserve income to Hyperliquid, up from a roughly 50-50 split with Circle. JPMorgan estimates Hyperliquid holds $6 billion of USDC, about 8% of circulating supply. The bank lowered earnings forecasts for both Circle and Coinbase, citing the Hyperliquid changes and weaker crypto markets. USDC supply has fallen to $73 billion from $80 billion in March amid broader stablecoin market contraction and increased competition.

Hyperliquid's HIP-3 permissionless framework for perpetual markets has surged to nearly 50% of the exchange's total perpetual volume, up from about 2% at the start of the year. The growth is driven by increasing retail demand for onchain equity trading, notably through TradeXYZ which offers Nasdaq-100 and single-stock perpetuals settled in stablecoins. Perpetuals offer advantages over traditional options, such as avoiding time decay and being more intuitive for retail traders. The 24/7 trading capability allows immediate reaction to news, though it lacks circuit breakers. Since underlying stocks trade only during market hours, HIP-3 prices outside those windows rely on oracle and funding-rate mechanisms, an unproven setup for this asset class.

Phantom and Hyperliquid Policy Center have urged the CFTC to exempt blockchain developers and non-custodial wallet providers from rules designed for traditional financial intermediaries. In a response to a CFTC request for information, the companies argued that existing regulations are tailored for custodial entities, while onchain protocols enable direct user transactions without intermediaries. The groups requested that the CFTC confirm developers do not need to register solely for creating software, issue guidance for regulated firms using blockchain, and codify exemptions for non-custodial wallets. They warned that without changes, American users will remain excluded from onchain derivatives markets while innovation moves offshore. The letter comes amid intensifying debate over regulating onchain derivatives. In May, ICE and CME urged scrutiny of Hyperliquid’s energy perpetuals, citing market integrity risks. ICE CEO Jeffrey Sprecher called for a level playing field to allow 24/7 onchain trading, while CME sued the CFTC over its approval of crypto perpetuals.

Bitwise has removed Polkadot (DOT) and Avalanche (AVAX) from its Bitwise 10 Crypto Index ETF (BITW) during its latest monthly rebalance, replacing them with Hyperliquid (HYPE) and Stellar (XLM). HYPE enters with a 0.93% weight and XLM at 0.38%, while Bitcoin remains dominant at 77.54%. Hyperliquid, ranked 10th among cryptocurrencies with a market cap of $15 billion, runs the leading decentralized exchange for perpetual futures. Stellar, ranked 18th, qualifies through Bitwise's eligibility screens. DOT and AVAX were dropped due to their declining market cap rankings, not project quality. DOT has fallen 98% from its peak to trade near $0.83, ranked 53rd, while AVAX is down 95% to $6.76, ranked 32nd. Their removal does not affect their underlying networks, which continue to operate normally. Hyperliquid is likely to retain its seat due to its large market cap, which is ten times that of DOT and five times that of AVAX. Demand signals remain positive, with inflows into HYPE products, and Bitwise also offers a dedicated Hyperliquid ETF. The main risk is that only 22% of HYPE's total supply is circulating, with scheduled unlocks potentially pressuring prices. However, as long as demand outpaces new supply, HYPE is expected to maintain its position.

The Hyperliquid Policy Center and Phantom have urged the CFTC to update its rules for onchain trading, arguing that current regulations designed for centralized intermediaries do not fit decentralized finance. In a comment letter, they stated that building onchain software like Hyperliquid should not trigger registration as an exchange or clearinghouse, and non-custodial front-end providers like Phantom should not register as introducing brokers. The CFTC and SEC issued a joint RFI in June seeking input on regulations impacting financial innovation. HPC and Phantom also argued that CFTC-registered firms should be able to use blockchain for trading and clearing. Under Chair Michael Selig, the CFTC has taken a more accommodating approach, recently approving the first U.S.-regulated bitcoin perpetual futures contract.

The Hyperliquid Policy Center (HPC) and Phantom have jointly urged the CFTC to exempt DeFi from rules designed for traditional finance. In their July 9 comment, they argue onchain software and self-custodial wallets are tools, not intermediaries. The filing responds to a CFTC request for information. The groups seek confirmation that publishing protocol software does not require exchange registration, and want registered entities to use onchain systems for regulated functions. They also request formal rulemaking for Phantom's no-action relief. HPC and Phantom emphasize that non-custodial wallets do not hold funds or execute trades. Clear rules, they say, would keep developers in the US and allow DeFi to reduce counterparty risk. The CFTC, now led by Chairman Michael Selig, is seen as more crypto-friendly.

Decentralized exchange Hyperliquid is demonstrating how blockchain-based perpetual futures could challenge traditional finance, according to Pantera Capital. The firm notes that perpetual futures offer 24/7 trading, no expiries, and continuous price discovery, making them attractive beyond crypto. Hyperliquid has expanded into equities, commodities, and stock indices, aligning with founder Jeff Yan's vision of housing all finance. Its growth has drawn attention from traditional players like ICE, whose CEO urged regulators to create a level playing field for onchain perps. Onchain perpetual futures volumes have risen to 14% of centralized exchange volumes, up from under 1% in early 2023, with Hyperliquid accounting for roughly 40% of onchain perps trading. It generates $13.5 million in weekly fees, ranking as the fourth-largest fee-generating protocol.

AFX has launched a sovereign Layer 1 blockchain for perpetual futures trading, aiming to challenge Hyperliquid's dominance. Unlike Hyperliquid's custom trading L1, AFX offers fully on-chain order books, matching, and settlement with zero-gas execution and 100ms latency, positioning itself as a vertically controlled alternative. AFX differentiates from dYdX by pushing more of the trading process on-chain, including order placement and settlement. It also contrasts with other perp DEXs like Lighter, Drift, and Aevo through its dedicated L1 approach, which integrates consensus, order book execution, and risk management in one system. The platform targets professional traders, market makers, and automated strategy builders with features like agent wallets and low fees. AFX distributes 73% of its token supply to the community, with no VC allocation, and offers revenue-sharing through a VIP program. However, its long-term success depends on proving liquidity depth and performance during volatile markets.

Phantom, the crypto wallet, has hired the team behind Ventuals, the project that recently shut down its OpenAI and Anthropic perpetual futures markets on Hyperliquid. The trio—Alvin Hsia, Emily Hsia and Aris Samad—will join Phantom's trading and data teams, CEO Brandon Millman said Tuesday. The move is part of Phantom's broader push into trading, as wallets increasingly evolve into full-service financial apps. Perpetual futures have become a fast-growing crypto product, expanding beyond digital assets into traditional markets like private companies and commodities. Millman said Phantom plans to 'go deeper' on perpetuals and open markets, having become the largest distribution partner in the Hyperliquid ecosystem.