Hyperliquid (HYPE) Price Rally: Could This Spark Institutional Interest?

In 2025, the cryptocurrency sector has experienced a dramatic transformation in on-chain liquidity, with Hyperliquid (HYPE) taking center stage. The platform’s token soared by 64.8% in the first half of the year, igniting discussions about whether this growth is a temporary speculative spike or marks a fundamental shift powered by robust, institutional-level infrastructure. To explore this, we need to analyze Hyperliquid’s breakthroughs in on-chain liquidity, market mechanisms, and regulatory compliance—areas that are increasingly drawing the interest of major financial institutions.

On-Chain Liquidity: How HLP Is Transforming Market Behavior

Hyperliquid’s Hyperliquidity Provider (HLP) has set a new standard for decentralized trading by delivering open, real-time liquidity through a pooled vault system. Managing assets exceeding $500 million, the HLP generated $40 million in profits even during a downturn in 2025, highlighting its robustness in turbulent markets, as noted in a

. This approach stands in stark contrast to conventional centralized exchanges, where liquidity is less transparent and exposed to counterparty risks. By ensuring on-chain counterparties, Hyperliquid has created a positive feedback loop: increased liquidity draws more traders, which boosts fee generation and further investment into the HLP.

The platform’s two-tiered system—HyperCore for trade execution and HyperEVM for smart contracts—enhances these benefits. HyperCore offers execution speeds measured in milliseconds and can theoretically handle hundreds of thousands of transactions per second, according to a

, enabling Hyperliquid to secure 75% of the decentralized perpetual trading market in 2025, as stated in a . This level of performance challenges leading centralized exchanges like ByBit and OKX, whose market dominance has been threatened by Hyperliquid’s blend of decentralization and CEX-like speed.

Market Structure Changes: Fee Systems and Order Book Liquidity

Another key innovation is Hyperliquid’s fee system. With a taker fee of 0.45% and a maker fee of 0.015%, the platform offers some of the lowest rates in the sector, encouraging liquidity providers to stay active even during periods of high volatility, according to a

. Notably, 97% of collected fees are directed to the Assistance Fund, which repurchases HYPE tokens and redistributes them to holders. This creates a reinforcing cycle: greater trading activity leads to more fees, which are used for buybacks, reducing token supply and increasing demand.

The depth of the order book has also improved significantly. In the first half of 2025, Hyperliquid’s perpetual trading volume jumped by 110.72%, with open interest rising from $3.19 billion to $15.3 billion—a 479% surge, according to a

. This expansion is partly due to initiatives like the HyperUnit spot market, which enables cross-chain trading by tokenizing assets such as and . By the second quarter of 2025, HyperUnit had processed $4.05 billion in spot trades, according to a , highlighting the platform’s role in connecting decentralized and traditional financial systems.

Institutional Integration: Compliance, Asset Security, and Product Growth

Interest from institutional players in Hyperliquid has grown rapidly in 2025, thanks to enhanced compliance features and secure asset management options. The BorrowLendingProtocol (BLP), currently being tested on the Hypercore testnet, allows users to borrow, lend, and withdraw assets like

and PURR, as reported by