Arthur Hayes, chief investment officer at Maelstrom and co-founder of BitMEX, sold 96,600 Hyperliquid (HYPE) tokens for roughly $5.1 million, less than three weeks after his bullish prediction about the asset.
Over the weekend, reports emerged that the crypto entrepreneur sold his entire stash of the decentralized exchange platform’s native token, sparking concerns about his position on the protocol.
Hayes initially said the sale was made to fund the purchase of a Ferrari. However, Maelstrom later clarified that the decision was rooted in risk management rather than luxury spending.
Why Hayes sold Hyperliquid
In a Sept. 22 statement on X, Maelstrom pointed to HYPE’s structural challenges, particularly its upcoming token unlock schedule, as a significant factor that could impact its price performance.
According to Maelstrom, Hyperliquid faces a “Damocles Sword” moment beginning Nov. 29, when 237.8 million tokens will start vesting linearly over 24 months. At an average price of $50, that amounts to $11.9 billion in potential supply, or roughly $500 million in tokens released monthly.
The fund calculated that Hyperliquid’s buyback mechanism can only absorb about 17% of this issuance, exposing roughly $410 million worth of tokens to open-market sales each month.
Moreover, the crypto fund noted that demand from digital asset treasury firms like Sonnet might not be enough to save Hyperliquid as their purchases would be “just a drop in the bucket compared against impending HYPE unlocks.”
In addition, the firm added that HYPE developers are likely to sell portions of their allocations once vesting begins.
According to Maelstrom:
“Put yourself in the shoes of a Hyperliquid dev. You’ve worked insanely hard for years. A life changing sum in tokens is starting to vest; and it’s only one click away. What would you do?”
Rising competition
Beyond the token economics, Maelstrom argued that Hyperliquid now faces stronger rivals in the perpetual DEX arena from Lighter and Binance-backed Aster.
Over the past week, the new platform has enjoyed significant support from Binance founder Changpeng Zhao and boasts several unique features like hidden orders and multichain support.
As a result, Aster has emerged as a darling of the crypto industry, with its DEX volume flipping that of Hyperliquid during the last 24 hours.
Considering this, Maelstrom stated:
“You don’t eat the crypto establishment’s lunch and walk away unchallenged. Business is war, and the half-life of most crypto products has historically been short – winners attract a swarm of vampire attacks.”
Meanwhile, Hayes has not abandoned his bullish stance entirely as he maintained that HYPE could still achieve a 128x gain by 2028.