HYPE funds see strong inflows as investors abandon bitcoin and ether ETFs

Crypto fund flows are showing increasing divergence, as investors pull capital from bitcoin and ether ETFs while redirecting funds into alternative tokens such as Hyperliquid’s HYPE and XRP.

Bitcoin-focused ETFs logged more than $1 billion in outflows last week, extending a broader wave of institutional selling. Ether products also faced continued pressure, shedding an additional $215 million, according to SoSoValue. The sustained withdrawals from the two largest digital assets point to weakening demand for traditional, large-cap crypto exposure.

Despite this, the broader market is not seeing a full exodus of capital.

Instead, funds are being selectively redeployed. Investment products tied to Hyperliquid’s HYPE token—offered by Bitwise and 21Shares—recorded combined inflows of $72.38 million. XRP and Solana ETFs also attracted fresh capital, bringing in $22 million and $15.6 million, respectively.

“The trend highlights rotation rather than retreat,” said Timothy Misir, head of research at BRN, noting that investors are shifting toward emerging narratives while trimming exposure to crowded positions.

That rotation is reflected in market performance. HYPE has rallied from $38 to $63 over the past 10 days and is up 59% on the month, significantly outperforming bitcoin, which has posted a modest 1% gain during the same period.

On the fundamentals side, Hyperliquid continues to gain traction. The platform generated $13.2 million in fees over the past week, ranking fifth overall behind major players such as Tether, Circle, and Pump. Canton Network placed fourth, although much of its activity has been driven by incentive programs, according to DeFiLlama data.

Looking ahead, Hyperliquid’s growth could accelerate following its recent partnership with Coinbase and Circle to integrate USDC as a quote asset, a move expected to enhance liquidity and trading activity.

Market observers say the platform is increasingly emerging as a challenger to traditional trading venues and prediction markets. Since the escalation of the Iran conflict in late February, its HIP-3 market has consistently processed strong volumes in perpetual futures tied to real-world assets, including oil, gold, and U.S. equity indices.

Data from Artemis shows that Hyperliquid’s fundamentals remain strong, with HIP-3 markets reaching a record $2.6 billion in open interest across RWA perpetuals. Meanwhile, the recently launched HIP-4 outcome markets are still in the early stages of adoption.

According to Artemis, sectors such as equity perpetuals, pre-IPO trading, and prediction markets are still in their infancy—positioning Hyperliquid to capitalize on future growth as these segments expand.