After dumping 96,600 HYPE, Arthur Hayes has issued a warning in an article titled “HYPE’s Damocles Sword.”
Notably, Hayes’ warning comes just weeks before the Hyperliquid token unlock slated to start on November 29, 2025. The token unlock event will see 237.8 million HYPE unlock over 24 months.
At $50 each, the tokens equal $11.9 billion, which is close to $500 million entering the market every month.
The issue runs deeper. Current buybacks can only handle about 17% of this flow. That leaves a $410 million monthly gap.
The scale is hard to ignore. For a project that has been on an incredible run, this moment could shift the story.
Hyperliquid has dominated volumes and pushed its ecosystem to new highs. The USDH bidding battle was described as one of the most competitive events in crypto.
Yet, the very success that lifted HYPE now sets the stage for its toughest challenge. The flood of tokens could weigh heavily unless demand meets supply.
Sonnet DAT amasses $583M in HYPE and $305M cash
Sonnet, one of the largest decentralized asset trusts in crypto, has gathered around $583 million in HYPE and $305 million in cash.
Other DATs have added smaller sums. Together, they represent a significant effort. But compared to the $11.9 billion unlock, they remain small.
The question is whether these structures can offset the pressure. They offer a buffer but not a cure.
If holders decide to cash out, markets must absorb billions over time. For early developers, the temptation will be strong.
Years of work now translate into tokens that can change their lives instantly.
That human factor could drive more sell pressure. Each month, a large pool of vested tokens will sit just one click away from the open market.
No DAT, no buyback program, and no strategy can fully remove that tension.
Hyperliquid faces rising competition from rivals
Crypto rewards winners but never lets them rest. Hyperliquid has challenged the establishment, and rivals are circling.
Lighter.xyz, a Maelstrom-backed platform, is already drawing attention. Larger exchanges also see an opening.
Even Binance has made moves, with CZ pushing Aster only months before the unlocks. Few in the space think this timing is random.
When supply overhang meets competition, volatility follows. Traders and funds will test Hyperliquid’s resilience.
If demand stays strong, the project may ride through the storm. If not, the market could see one of the largest unlock-driven selloffs in crypto history.