Hyperliquid Bleeds 16% As VanEck Issues Warning

Hyperliquid The Biggest Loser In The Recent Crypto Market Correction As VanEck Warns The Project Might Unravel

Updated: 08 January 2025

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Hyperliquid suffered the biggest 24-hour loss in the latest crypto market correction as VanEck says the project stands the risk of unraveling if it does not attract software developers soon.

Throughout the past day of trading, Hyperliquid’s native token HYPE plunged over 16% to trade at $21.26 as of 12:07 a.m. EST. This pullback coincided with a more than 6% broader market correction.

VanEck Says Hyperliquid Needs More Developers

Asset manager VanEck said in a Jan. 6 research note that layer-1 blockchain project Hyperliquid will need to bootstrap a robust developer community soon if it wants to maintain its $25 billion market cap.

Since its November HYPE airdrop, Hyperliquid has become one of the most valuable projects in the Web3 space. Despite its popularity in the market, VanEck noted that Hyperliquid has “yet to attract much of a developer community.”

Deep dive on Hyperliquid in our crypto monthly update https://t.co/54mKiwtLHO

— VanEck (@vaneck_us) January 6, 2025

“If Hyperliquid is unable to meet the growth expectations of its community, the prisoner’s dilemma facing many newly rich HYPE holders may quickly unravel,” VanEck warned in the research note.

Hyperliquid Has Captured Around 70% Of The Perpetual Futures Exchange Market

Hpyerliquid’s perpetual futures exchange has managed to capture around 70% of the market since the project’s launch last year, leaving rivals such as GMX and dYdX in the dust. According to VanEck, the platform currently facilitates around $260 million in transactions on a daily basis.

This growth comes amid an increase in trading activity on decentralized exchanges, with the monthly volume on these platforms hitting an all-time high of $433 billion in December.

However, VanEck says that decentralized exchanges such as Hyperliquid “tend to lack long-term competitive moats” due to their code being open source and their features which are “easy to copy.”

This year, the project aims to launch an Ethereum Virtual Machine smart contract platform. VanEck says this product will play a crucial part in diversifying Hyperliquid’s revenue and could also help justify HYPE’s current valuation.