Hyperliquid ETF Inflows Reversal Raises Concerns Over Competition

The Hyperliquid ETFs have seen a reversal in inflows, raising concerns among investors. These funds got off to a strong start, with impressive asset under management (AUM) tallies, but momentum has since evaporated.

The Grayscale Hyperliquid Staking ETF and its competitors, the Bitwise Hyperliquid ETF and the 21Shares Hyperliquid ETF, were initially successful in attracting investors. The latter two combined for more than $150 million in AUM despite being less than five months old, while the Grayscale ETF has over $113 million in AUM.

However, the main reason for the reversal in flows is the growing competition from centralized exchanges in the perpetual futures market. Perpetual futures are a key aspect of Hyperliquid's success, with more than $633 billion in volume traded on this protocol in the first quarter of 2026. Much of the related fees went toward Hyperliquid token buybacks, acting as a supply suppressant.

The possibility that traders may prefer to transact in perps on platforms regulated in the U.S., such as those offered by JPMorgan, could further strain Hyperliquid's position in the market. This could make it difficult for investors to maintain inflows into these funds if Hyperliquid loses its competitive edge.