Hyperliquid is Challenging Traditional Exchanges and Prediction Markets

Digital asset prime broker FalconX mentioned in their latest report that decentralized exchange Hyperliquid is breaking the traditional boundaries of crypto perpetual futures, expanding into pre-IPO markets, prediction contracts, and tokenized real-world assets, and starting to compete directly with traditional exchanges and prediction market operators.

Hyperliquid initially relies on crypto perpetual futures to accumulate trading volume, and perpetual futures have always been the most important derivatives in offshore digital asset trading. The platform's native token HYPE has risen 94% in the past three months, but its new growth narrative is no longer limited to crypto-native traders.

FalconX Senior Crypto Market Strategist David Lawant stated in the report that Hyperliquid's recent entry into pre-IPO markets, prediction contracts, and tokenized real-world assets significantly broadens its coverage of demand from non-crypto-native traders. This shift is mainly attributed to the rapid rise of the HIP-3 market.

“As the HIP-3 market demand extends to pre-IPO contracts, Hyperliquid's trading appeal is significantly enhanced.”

The HIP-3 market allows users to trade stocks, commodities, foreign exchange, and pre-IPO contracts around the clock. Traders have begun betting on the pre-IPO performance of companies like Cerebras, Anthropic, and SpaceX through this market, extending Hyperliquid's trading scenarios from pure crypto assets to areas closer to traditional capital markets.

Additionally, Hyperliquid has launched the HIP-4 result market, which operates similarly to prediction markets and allows traders to bet on the outcomes of binary events in politics, economics, and the crypto space. FalconX believes that trading prediction contracts, crypto derivatives, and real-world asset positions on the same platform could become a significant advantage for Hyperliquid.

“For example, traders can hold a HIP-3 perpetual position in NVDA and hedge it with a result market contract on whether its earnings exceed expectations.”

The report also pointed out that early demand for spot ETFs linked to the HYPE token has been strong. According to Bloomberg data, the HYPE spot ETFs launched by 21Shares and Bitwise attracted $53 million in inflows within just a few days of trading. Measured by market cap of HYPE, this early inflow outperformed the performance of Bitcoin, Ethereum, and Solana ETFs in the same stage.

Furthermore, Hyperliquid has recently collaborated with Coinbase and Circle to use USDC as an asset for aligning quotes on the platform. FalconX estimates that based on the reserve income corresponding to the platform's USDC balances, this collaboration could potentially bring in up to $160 million in revenue per year for Hyperliquid.