The cryptocurrency industry has experienced significant turbulence in the first month of 2025, with two major market crashes wiping out billions in leveraged positions. Despite these unsettling events, the price of Hyperliquid’s native token, HYPE, has remained remarkably stable. Let’s dive into the prime reasons behind HYPE’s strong and resilient performance during such volatile times.
1. High Trading Volume
Hyperliquid, a decentralized exchange (DEX) known for its low transaction fees and seamless trading, has earned a reputation as a powerhouse in the DeFi space. One of the key reasons behind HYPE’s price stability is its impressive daily trading volume. On January 31, 2025, Hyperliquid reported a trading volume of $7 billion. This substantial volume has shielded HYPE from high volatility, reinforcing the token’s demand in the market. Despite offering low trading fees, Hyperliquid generates $4 million in daily revenue, which highlights its solid user base and the platform’s growth potential.
2. Token Burn & Buyback Mechanism
Hyperliquid’s token burn and buyback mechanisms have contributed to HYPE’s price stability. Token burning is a common practice in the crypto space to reduce the circulating supply, and Hyperliquid recently burned $2,700 worth of HYPE during the market downturn. This was the largest burn rate since Christmas 2024. Furthermore, the platform actively engages in token buybacks, having purchased $4 million worth of HYPE tokens, which generated bullish sentiment among holders. These strategic actions help control supply, enhancing demand and protecting the token’s price from drastic crashes.
3. Influencer Promotions & Whale Buying Activity
The influence of popular media figures, such as Adin Ross, has also played a crucial role in boosting HYPE’s price stability. Ross and his 50,000 followers have promoted Hyperliquid and its token, creating positive sentiment around HYPE. Additionally, large whale investors have shown confidence in the token, with one whale reportedly purchasing $950,000 worth of HYPE. This combination of influencer promotions and significant whale buying has helped stabilize HYPE’s market position.
I can't bull post $HYPE every day, but the numbers make it hard not to:
— Tobias Reisner (@reisnertobias) February 4, 2025
1. Token Burn 🔥$HYPE didn’t just hold up nicely during the leverage wipeout yesterday—they also burned 2.7K tokens, the most since Christmas.
2. Cashcow Activated 💰
Hyperliquid makes $4 million in fees… pic.twitter.com/pJG56GHHLK
Despite the volatility in the broader cryptocurrency market, HYPE has demonstrated resilience due to its high trading volume, strategic token burns, buybacks, and strong backing from influencers and whales. With analysts predicting a potential price target of $72, HYPE’s strong fundamentals and market demand could set the stage for further growth, making it an attractive asset for investors in the DeFi space.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
Also Read: Hyperliquid (HYPE) and SUI Surge: Price Analysis, Bullish Outlook, and What’s Next for Both Tokens
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