Bitwise CIO Calls Hyperliquid 'Undervalued' as Token Surges 77% YTD

Matt Hougan, chief investment officer at Bitwise, has publicly stated that Hyperliquid (HYPE) is undervalued, citing the token's deflationary buyback mechanism as a driver of long-term value creation. The endorsement from one of crypto's largest institutional asset managers comes as HYPE leads large-cap cryptocurrency gains in 2026, up 77% year-to-date.

Hougan's bullish assessment signals growing mainstream recognition of Hyperliquid's model within the decentralized derivatives space. The protocol's buyback mechanism directs a portion of protocol revenue back to purchase and burn HYPE tokens, creating deflationary pressure that aligns incentives with token holders. This approach has gained traction across DeFi protocols since 2024, as projects seek sustainable models for token value capture beyond pure speculation.

Hyperliquid has emerged as a significant competitor in on-chain derivatives trading, where users can trade perpetuals and spot positions without custodial intermediaries. The protocol's token economics reward early adoption and protocol participation. The buyback-and-burn model theoretically creates a self-reinforcing cycle: as protocol revenue grows, more tokens are removed from circulation, potentially supporting price appreciation even if trading volume remains flat.

The timing of Hougan's statement reflects broader institutional interest in DeFi protocols that have demonstrated sustainable revenue models. Unlike many altcoins that rely on narrative or speculative demand, Hyperliquid generates real protocol revenue from trading fees, giving the buyback mechanism actual economic substance. Bitwise manages billions in crypto assets and has been a vocal advocate for regulatory clarity around digital assets.

A 77% year-to-date gain already represents substantial appreciation. Questions remain about whether further upside is priced into current valuations and whether Hyperliquid's competitive moat against other derivatives protocols is durable enough to justify institutional positioning. Buyback models can lose effectiveness if token demand weakens or if competing protocols capture market share. Institutional endorsements, while credible, can amplify hype cycles that temporarily disconnect token prices from underlying protocol utility.

Hougan's call reflects confidence that Hyperliquid's fundamentals support higher valuations, particularly if the protocol continues to scale trading volume and revenue. Execution over the coming quarters will determine whether the market validates this assessment.