Crypto Firms Spend Record $638 Million on Token Buybacks Amid Market Downturn

Digital asset companies are aggressively implementing token buyback strategies to support their own cryptocurrency prices amid a market downturn. According to blockchain analytics firm Allium Labs, these firms have spent $638 million repurchasing their tokens this year, a record high.

The majority of this spending comes from two companies: Hyperliquid and pump.fun, which together account for nearly 90% of total buybacks. Hyperliquid has allocated 99% of its trading fee revenue to repurchasing its native HYPE token, having cumulatively repurchased $1.3 billion worth of tokens since its launch in December 2024.

While some companies have seen success with their buyback programs, others have not been as fortunate. Decentralized exchange Jupiter has invested nearly $14 million this year in buying back its own token, yet its price has still fallen 55% over the past year. Chainlink's LINK token has halved in dollar-denominated value over the same period.

The effectiveness of buyback strategies is a topic of debate among experts. Matt Hougan, Chief Investment Officer at Bitwise, believes aggressive buybacks are the primary reason for HYPE's strength, giving investors confidence that the benefits of increased blockchain activity will ultimately be reflected in token prices. However, Allium Labs' Elton Shehdula remains skeptical about whether buybacks can significantly boost cryptocurrency prices.