Grayscale has registered a Hyperliquid [HYPE]-linked statutory trust in Delaware, a typical step before filing for an official S-1 ETF application. This would effectively make it the fourth asset manager to join the U.S Spot HYPE ETF race after Bitwise, VanEck, and 21shares.
Source: Delaware
According to market watchers, HYPE will be the youngest altcoin to hit the ETF milestone if these applications are approved.
A collective demand from institutional investors via ETFs, alongside corporate treasuries and ongoing buybacks, could be net positive for the altcoin in the long run.
However, will ETF expectations offset the ongoing weak market sentiment and HYPE price momentum in the short term?
HYPE sentiment stuck at ‘fear’ level
HYPE’s early 2026 recovery hit 18% after climbing to $28 by 06 January. However, nearly all the gains were erased afterwards. And, the market sentiment didn’t reset despite the ETF expectations.
Source: Gate
During the early 2026 recovery, HYPE’s sentiment fluctuated between “fear” and “extreme fear” levels.
Surprisingly, the ongoing buyback has been net deflationary with little impact on the market sentiment. The project bought back and burned 80k HYPE tokens in the last 24 hours, compared to 26.7k HYPE from staking rewards –A 3x deflationary.
HYPE’s sentiment has remained sour because of ongoing monthly unlocks, whale sell-offs, and rising competition from Lighter, Aster, and other perp DEXes, according to trader Altcoin Sherpa.
Sherpa added,
“It’s (Hyperliquid) eventually going to lead the market again but not sure when that will be. I think Lighter probably continues to outperform it in the short term.”
Will dip buying reverse HYPE losses?
Even so, the Spot Taker CVD (Cumulative Volume Delta) has turned positive for the first time since last May.
This implied active dip buying on the spot markets despite weak sentiment and price levels. This could improve recovery odds, especially if the broader market sentiment also flips positive.
Source: CryptoQuant
Meanwhile, the latest price reversal at $28 has turned it into a crucial short-term hurdle that doubled up at the 50-day Moving Average (white sloping line). For confirmed and sustainable recovery, $28 and the moving average must be flipped into support.
Otherwise, the lows at $23 and $22 could be tagged again.
Source: HYPE/USDT, TradingView
Final Thoughts
- Grayscale joined Bitwise, VanEck, and 21Shares in the U.S Spot HYPE ETF race.
- However, market sentiment has been muted amid monthly unlocks and competition.
