Hyperliquid buybacks pressure builds while Hyperliquid buybacks faces the next market test

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Hyperliquid's automated buyback strategy has pushed HYPE token above $62, briefly surpassing Solana’s fully diluted valuation. The Assistance Fund has spent over $1.16 billion in trading fees to repurchase HYPE since launch. The fund operates independently of quarterly approvals, continuously buying HYPE from the open market. This model is designed to sustain long-term demand by reducing circulating supply. In Q3 2025 alone, Hyperliquid spent $316.76 million on HYPE repurchases, but activity has since declined to $255 million in Q4 and $192 million in Q1 2026. Zennon Kapron of Forbes suggests the recent rally has been driven largely by Hyperliquid’s buyback system rather than ETF demand. The protocol routes about 99% of trading fees into the Assistance Fund, which executes open-market purchases automatically. This contrasts with public companies that require quarterly approvals for stock buybacks. Hyperliquid Strategies, a Nasdaq-listed firm, has accumulated roughly 20 million HYPE tokens, focusing entirely on holding and expanding HYPE exposure. Its latest quarterly profit reached $152.5 million, largely tied to unrealized gains from HYPE holdings. The success of Hyperliquid’s model will depend on whether the fund can maintain high trading volume to fund ongoing buybacks. If volume declines, the fund’s purchasing power could be reduced, potentially impacting HYPE’s price trajectory. The next signal to watch is whether HYPE can maintain its current level amid potential declines in quarterly buyback activity.