Should You Buy Hyperliquid (HYPE) After Its Recent Surge?

Hyperliquid is up 194% in 2026 and trades near $77, but the article argues its offshore perpetual futures advantage is eroding as U.S. regulators approve similar products for Kalshi and Coinbase, with Robinhood also expected to compete. Kalshi reportedly generated $1 billion in first-week trading volume, underscoring the potential threat to Hyperliquid's growth. The piece is bearish on HYPE’s ability to sustain outsized returns as U.S.-based, regulated competitors enter the market.

Analysis

The market is likely underestimating how fast regulated distribution can compress Hyperliquid’s moat. Perps are a classic liquidity business: once a U.S.-compliant venue offers comparable leverage, the winner is less about product novelty and more about balance sheet trust, fiat on/off-ramps, and embedded retail traffic. That structurally favors COIN and, to a lesser extent, HOOD, because both can turn perps into a feature inside a broader engagement loop rather than a standalone destination.

Second-order, this is less about immediate volume loss at Hyperliquid and more about a change in marginal customer acquisition. Offshore-native venues can survive on crypto-native whales, but the high-growth marginal user is the U.S. retail trader who already has funds parked at a regulated broker. If even a modest share of that flow migrates to domestic venues over the next 6-12 months, Hyperliquid’s growth multiple deserves to compress before fundamentals fully roll over. The market is paying for hypergrowth durability; regulation reduces duration.

The better trade is not a blind short on HYPE but a relative-value expression against the beneficiaries of legalization. COIN has the clearest monetization path because perps should lift trading frequency and derivative attach rates without requiring a separate customer acquisition funnel. HOOD is more optionality-driven: if it adds perps to the event-driven/speculative loop, it can increase engagement, but the revenue sensitivity is less proven and more dependent on product design and regulatory scope.

Contrarian angle: the move may still be early because regulatory approval does not instantly replicate offshore leverage depth, incentives, or global liquidity. Hyperliquid could retain a meaningful offshore base for years, and if it secures U.S. approval with only a slight modification, the bear case becomes mostly a valuation reset rather than an earnings collapse. The real risk to the shorts is that the category expands faster than the share shift, keeping total addressable volume growing even as competitive share fragments.

Key Decisions for Investors

• Long COIN / short HYPE as a 6-12 month relative-value trade: buy the regulated winner of perps normalization while betting HYPE’s growth premium fades; target 1.5-2.0x gross return on spread if U.S. derivative adoption sticks.
• Initiate a smaller pilot long HOOD vs. short HYPE only on weakness: HOOD has the most embedded retail distribution, but keep size modest because perps monetization is still optionality, not yet a proven earnings driver.
• Avoid outright shorting HYPE into strength unless borrow/liquidity is favorable: regulation can take longer than expected, and offshore demand may cushion the stock for multiple quarters; use call spreads or put spreads to define risk.
• If COIN breaks higher on any perps-related product announcement, trim the short leg on HYPE and rotate into a COIN-only long: the first derivative of regulatory adoption is likely a trading-volume surprise at the incumbent exchange rather than an immediate collapse in offshore activity.
• Set a 3-6 month catalyst watch on CFTC process milestones and product launches; if approval cadence slows, expect the competitive threat to be pushed out and the HYPE drawdown thesis to lose urgency.