JPMorgan: HYPE ETF Inflows Stall as Regulated Rivals Grow

The surge of investor money into Hyperliquid (HYPE) exchange-traded funds has cooled sharply after a strong spring. JPMorgan analysts said the slowdown reflects a broader shift: regulated U.S. platforms are rolling out their own perpetual futures products, directly competing with offshore decentralized venues like Hyperliquid.

CoinDesk reported Thursday that inflows into HYPE ETFs have "largely ground to a halt." The funds had led all non-bitcoin crypto products in relative inflows during May and June, drawing roughly $150 million in assets by early June. Bitwise and 21shares launched the spot ETFs tracking HYPE indexes in May.

The JPMorgan team attributed the deceleration to the growing availability of crypto perpetual futures on regulated domestic exchanges. The Commodity Futures Trading Commission cleared Coinbase and Kalshi to offer perpetual futures contracts to U.S. investors in late May. Both firms announced products shortly after, and Kalshi has since asked the CFTC for permission to expand into other asset classes.

Perpetual futures have long been the dominant trading vehicle in global crypto markets, but until recently they operated almost entirely outside the United States through offshore exchanges. Industry advocates argued that a regulated domestic venue would give U.S. institutions and retail traders access to products that previously required dealing with less transparent offshore platforms. Now that access exists, and some of the demand that flowed to Hyperliquid may be redirecting to Coinbase and Kalshi.

Coinbase reported July 30 that it is seeing adoption across perpetual futures, prediction markets and stock trading as it broadens its product lineup. The company did not break out perp volumes separately, but the CFTC approvals marked a significant expansion of the domestic crypto derivatives market.

The JPMorgan analysts said the trend could continue to pressure offshore decentralized exchanges. "As U.S.-regulated crypto perpetual futures products are rolled out, offshore decentralized venues like Hyperliquid could lose trading activity to the new offerings," the analysts said, according to the CoinDesk report.

Hyperliquid was virtually unknown until the U.S. engagement with Iran, when traders began using the platform to gain weekend exposure to oil markets. Its rise this year coincided with a broader appetite for crypto-native derivatives outside the traditional regulatory perimeter. Now that perimeter is widening.

The next catalyst for the sector may come from Kalshi's push into non-crypto perpetuals. If the CFTC approves, the same regulated structure that is siphoning volume from Hyperliquid could reach into commodities and other asset classes, further narrowing the offshore advantage.