Crypto investors turn selective amid rout

Investors are increasingly focusing on crypto tokens tied to revenue-generating platforms amid a broader market downturn. While bitcoin and ether funds saw net outflows of $3.4 billion and $674 million respectively since May, the Hype token—associated with the Hyperliquid exchange—reached a record $75.50 and climbed 180% this year, pushing its market value above $16 billion. Two new Hype-tracking ETFs from Bitwise Asset Management and 21Shares attracted $180 million in assets within three weeks of launch, signaling selective investor interest. Hyperliquid, a high-volume derivatives exchange, operates a fee-funded buyback mechanism for its Hype token, directly linking trading activity to token demand. This model contrasts with traditional crypto investments, where value creation often lacked clear ties to economic fundamentals. Analysts note that institutional investors now prioritize tokens with transparent revenue streams, similar to evaluating traditional financial technology companies. The shift reflects broader market fatigue with speculative tokens, many of which collapsed after failing to deliver sustained value. Bitcoin’s 50% drop from its October peak and the decline of thousands of altcoins have pushed investors toward projects with measurable profitability. Hyperliquid’s growth—one of the most profitable crypto venues—aligns with this trend, as its fee revenue supports token buybacks and shareholder value. Industry experts draw parallels to the post-dotcom era, where only revenue-generating internet companies survived. Jeff Dorman of Arca noted that Hype’s model is easier for traditional investors to assess, as its cash flows are tied to exchange performance. Meanwhile, Grayscale Investments’ new Hyperliquid ETF underscores institutional demand for tokens with operational fundamentals. The rally highlights a maturing crypto market, where investors now demand proof of revenue, user adoption, and sustainable value beyond price speculation. While outflows from mainstream crypto ETFs continue, niche tokens like Hype are gaining traction as investors bet on platforms that bridge blockchain activity with financial returns.