JPMorgan Flags Slowdown in Hyperliquid ETF Demand as Rivals Close In

Investor interest in Hyperliquid exchange traded funds has cooled sharply after a strong run earlier this summer, with JPMorgan pointing to rising competition as the main reason behind the slowdown.

Strong Start Followed by a Sudden Pause

According to JPMorgan, Hyperliquid ETFs led all non-bitcoin crypto funds in terms of inflows relative to assets under management during May and June. That momentum, however, largely dried up heading into July and early August. Analysts at the bank, led by Nikolaos Panigirtzoglou, said in a Thursday report that decentralized platforms like Hyperliquid are facing serious challenges to their market position going forward.

From Breakout Star to Facing New Pressure

Hyperliquid has been one of the standout performers in crypto this year, with its HYPE token climbing as traders moved toward its decentralized perpetual futures exchange. That growth turned the platform into one of the largest crypto ecosystems outside of bitcoin and ether, drawing interest from institutional investors, corporate treasuries, and ETF providers looking to offer exposure.

Competition From Regulated Exchanges Grows

JPMorgan said the slowdown is tied to increasing competition from regulated, centralized exchanges. As U.S.-regulated perpetual futures products roll out, trading activity could shift away from offshore decentralized platforms such as Hyperliquid, which continue to face scrutiny over licensing, compliance, and investor protection standards. The bank also pointed to growing competition in prediction markets, a space Hyperliquid has been expanding into as it tries to diversify its revenue beyond perpetual futures trading fees.

Despite the recent pullback in ETF demand, Hyperliquid remains the fourth-largest asset held in corporate crypto treasuries, trailing only bitcoin, ether, and solana.