The crypto market is feeling the heat today, with over $500 million in leveraged positions liquidated in the past 24 hours as the total market cap slipped about 2% to around $3.2 trillion.
Bitcoin (BTC) dipped below $120,000, shedding roughly 1.8%, while Ethereum (ETH) and altcoins like Solana (SOL) saw sharper drops of 2-3%. This pullback comes amid broader risk-off sentiment, including anticipation around the Federal Reserve’s rate decision and lingering effects from earlier volatility tied to U.S. trade policies.
Long positions dominated the carnage, with data from Coinglass showing BTC longs alone accounting for ~$250M of the wipeout. Interestingly, this isn’t the mega-crash of mid-October when $19B+ vanished in a single day due to tariff shocks, but it’s a reminder of how leveraged trading amplifies even modest dips.
Over 800,000 traders got caught in the crossfire, mostly on platforms like Binance and Bybit. If you’re trading with leverage, keep stops tight — volatility could spike further if Fed signals lean hawkish.
In brighter DeFi news, 21Shares submitted an S-1 filing to the U.S. SEC yesterday for a 2x Long HYPE ETF, aiming to deliver 200% of the daily returns for Hyperliquid’s native token ($HYPE).
This would be the first U.S.-listed leveraged ETF tied directly to a live DeFi protocol’s fees and perpetuals market performance — using swaps, futures, and options rather than direct token custody to amp up exposure.
The filing warns of volatility risks (e.g., holding beyond one day could lead to return decay), but it’s a bold play as Hyperliquid’s platform has boomed, processing billions in volume post its HIP-3 upgrade for user-launched perps markets.
$HYPE is holding steady around $46 today, up slightly despite the broader dip, buoyed by this news and Robinhood listings keeping it from sub-$45 support.
Analysts like Bloomberg’s Eric Balchunas call it “SO niche… but it could grow to a few billion” in AUM, drawing parallels to early smart beta ETFs. This joins filings from Bitwise spot HYPE ETF and VanEck, signaling a land rush for Hyperliquid products.
Approval could come by late 2025, potentially injecting fresh institutional liquidity into DeFi perps.If approved, expect this to supercharge $HYPE’s utility — think easier access for tradfi players to Hyperliquid’s Binance-rivaling ecosystem.
Bullish for DeFi adoption, but remember: leverage cuts both ways. HIP-3 transforms Hyperliquid from a curated decentralized exchange (DEX) into a fully permissionless infrastructure layer for derivatives markets.
In essence, it allows anyone — builders, DAOs, or institutions — to deploy their own perpetual futures markets (perps) directly on Hyperliquid’s core engine (HyperCore) without needing approval from validators or the protocol team.
This upgrade builds on Hyperliquid’s earlier proposals: HIP-1: Introduced the native $HYPE token standard. HIP-2: Enabled “Hyperliquidity,” a liquidity provision mechanism.
HIP-3 shifts the paradigm from centralized listing processes common on CEXs like Binance to a decentralized, open model, potentially capturing a slice of the $1.8 trillion global derivatives market by enabling on-chain trading of everything from crypto pairs to real-world assets (RWAs).
HIP-3 leverages HyperCore’s battle-tested infrastructure, which includes sub-second latency order books, a matching engine capable of millions of orders per second, and HyperBFT consensus for security.
Validators can slash stakes via stake-weighted votes for misconduct (e.g., faulty oracles, market manipulation). Slashing burns tokens to avoid conflicts. Open interest caps and isolated margin mode (cross-margin planned). Quote assets must meet on-chain standards or face disablement.
For $HYPE Token: Boosts utility and demand via staking/auctions/gas. Post-upgrade, TVL surged to $5.5B, and $HYPE rose 11-13% initially. Could lock 20%+ supply, supporting price floors and buybacks.
Creates a “flywheel” — more markets ? more volume ? more fees ? more staking. Positions Hyperliquid as the “AWS of liquidity,” rivaling CEXs amid competition from Aster and Lighter. Early adopters like Framework Ventures and Ethena are testing deployments.
New markets must self-bootstrap; low-volume ones could fail or suffer manipulation. HIP-3 is a bold step toward a “living derivatives ecosystem,” making Hyperliquid the go-to L1 for on-chain finance.
If it scales as projected, it could flip narratives around DeFi’s scalability and capture non-crypto volume. For devs eyeing deployment, check Hyperliquid’s docs for the Python SDK and API.
