BitMEX Founder Predicts 126x Growth for HYPE Token
Arthur Hayes Bullish on Hyperliquid's HYPE Token
Arthur Hayes, the BitMEX co-founder and current chief investment officer of Maelstrom, a crypto-focused venture capital firm, believes Hyperliquid’s HYPE token has significant upside potential. In a recent blog post, Hayes outlined a scenario where HYPE could increase 126 times, citing Maelstrom's internal valuation model.
Hayes is renowned for pioneering the perpetual swap at BitMEX, a groundbreaking derivatives contract. Maelstrom invests primarily in early-stage crypto infrastructure projects.
What is Hyperliquid?
Hyperliquid is a decentralized exchange (DEX) operating on its own blockchain. Unlike centralized exchanges, Hyperliquid is fully on-chain, enabling users to trade perpetual futures contracts. These contracts allow traders to speculate on crypto prices without expiration dates.
The native token, HYPE, serves a dual purpose: governance and economic participation. Token holders can vote on platform upgrades, stake their tokens for rewards, and benefit from the alignment of trading fees with the token's value.
Decentralized Binance?
Hayes argues that Hyperliquid is poised to become a dominant force in the decentralized trading landscape. He highlights the exchange's efficiency and rapid feature deployment compared to centralized competitors like Binance. Hyperliquid's infrastructure is fast, with transparent on-chain trading, settlement, and collateral management.
According to Hayes, Hyperliquid is a “decentralized Binance,” leveraging stablecoins for deposits but with all transactions immutably recorded on its blockchain. The HIP-3 upgrade allows external developers to create new markets, further expanding its ecosystem.
The 126x Upside: The Valuation Model
Maelstrom's valuation model projects a substantial increase in the total value of stablecoins, potentially reaching $10 trillion by 2028.
Applying a historical ratio from Binance, where daily trading volume equates to approximately 26.4% of the total stablecoin supply, Hyperliquid could facilitate around $2.6 trillion in daily trades.
With Hyperliquid charging roughly 0.03% per trade, this translates to approximately $258 billion in annual revenues.
Discounting these future revenues at a 5% rate yields a present value of approximately $5.16 trillion. Comparing this to HYPE’s current fully diluted valuation of around $41 billion results in the potential 126x upside.
Challenging Binance?
Hayes concludes by suggesting that Hyperliquid could eventually surpass Binance as the leading exchange. However, this prediction hinges on specific assumptions: a $10 trillion stablecoin market, Hyperliquid capturing a Binance-level market share, sustained low fees, and stable discount rates.
If the world increasingly saves in stablecoins, Hayes believes that Hyperliquid is positioned to capitalize on the subsequent on-chain speculation, with HYPE as the key to capturing that value. For projects seeking to launch tokens within ecosystems like Hyperliquid, Codeum provides a suite of services, including secure smart contract audits and comprehensive KYC solutions, to ensure trust and compliance.