Grayscale Sees Undervaluation as Hyperliquid Token Price Plummets
Hyperliquid's token price has been declining over the past month, dropping by more than 13% and reaching its lowest point in three months. This decline coincides with a significant withdrawal of funds from Hyperliquid-linked exchange-traded funds (ETFs), with net outflows totaling over $13 million in July.
The ETFs had attracted about $280 million since their inception, but this reversal marks the first negative month for these products. According to SoSoValue data, nearly $27 million has left the funds since demand reversed in the second half of July.
Grayscale Research, however, believes that Hyperliquid's token is undervalued, despite the decline in demand. They argue that the token's price does not accurately reflect the revenue generated by the underlying network. Grayscale estimates that Hyperliquid could approach $1 billion in annual revenue by 2027, supported by a recovery in crypto trading and additional income from its stablecoin infrastructure.
The firm expects between 270 million and 310 million HYPE tokens to be circulating by the end of 2027, depending partly on how quickly allocations to core contributors enter the market. Based on these assumptions, Grayscale estimates earnings per token of about $3.25 to $3.75. At the current price, this puts Hyperliquid's valuation at around 15 to 18 times projected earnings.
Grayscale Research Managing Director Zach Pandl compared this valuation to those of Coinbase and Circle, which are expected to reach multiples of 35 and 40 times earnings, respectively. He stated, 'On that basis, we think it looks cheap.'