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Hyperliquid ETF Inflows Stall As Competition Mounts

U.S. bank JPMorgan Chase (NYSE: $JPM) says that inflows into Hyperliquid (CRYPTO: $HYPE) exchange-traded funds (ETFs) have ground to a halt after surging in May and June.

Analysts at JPMorgan say Hyperliquid ETFs are struggling as they face slowing momentum and increased competition in the ETF space from funds focused on both stocks and crypto.

Hyperliquid ETFs led non-Bitcoin crypto funds in inflows during both May and June of this year, but momentum has faded sharply since then.

Nikolaos Panigirtzoglou, the lead crypto analyst at JPMorgan, wrote in a note to clients that “We see significant challenges to the market share of decentralized platforms such as Hyperliquid.”

Hyperliquid had been one of crypto's biggest breakout stories this year, with the HYPE token surging as traders flocked to the decentralized perpetual futures exchange.

The rapid growth turned Hyperliquid into one of the largest crypto ecosystems outside of Bitcoin, attracting institutional capital, corporate treasury buyers, and ETF issuers.

But JPMorgan says that cooling demand is occurring as decentralized derivatives platforms face mounting competition from regulated centralized exchanges.

Panigirtzoglou adds that Hyperliquid faces intensifying competition from prediction markets, an area Hyperliquid is expanding into as it looks to diversify beyond perpetual futures trading.

The bank added that it is unclear whether Hyperliquid can continue gaining market share from larger rivals such Bitcoin, as well as Solana (CRYPTO: $SOL) and XRP (CRYPTO: $XRP).

Bitcoin ETFs continue to dominate the market with roughly $77 billion U.S. of assets under management. Hyperliquid ETFs collectively account for $2 billion U.S. of assets.

The HYPE token was trading more than 3% lower at $55.30 U.S. early on Aug. 6.