Some cryptocurrencies have been outperforming the rest of the crypto market recently, driven by strong fundamental incentives and significant user-generated fees for their protocols.
One such token is the Hyperliquid layer-1 blockchain’s HYPE token, which has outperformed the cryptocurrency market since its launch on Dec. 7, 2024.
In a little over two months, HYPE’s price has gained more than 176%, outperforming the top cryptocurrencies and the growth of the wider market.
HYPE, BTC, ETH, total three-month chart. Source: TradingView
During the same period, Bitcoin (BTC) fell 3%, Ether (ETH) fell 32%, and the total market capitalization of altcoins, excluding the above two, fell by 18%, TradingView data shows.
Hyperliquid’s performance is partly attributed to solid “fundamentals,” including its token buyback program, according to James Ho, co-founder of crypto investment firm Modular Capital.
“Only a handful of tokens with positive YTD price performance,” wrote Ho in a Feb. 13 X post, adding:
“[HyperliquidX] – $400-500M of run rate fees vs $8-9B circ[ulating supply] (20x) and entirely used for buybacks.
Source: James Ho
Hyperliquid’s fees are “entirely directed to the community,” which flow into its “Assistance Fund” for token buybacks and the Hyperliqudiity Provider for market making, according to the protocol’s technical documentation.
The project came into the spotlight after staging the most valuable airdrop in crypto history, which soared to a total value of $7.5 billion on Jan. 15, as Cointelegraph reported.
The decentralized launch of the HYPE token marks the beginning of a new era for fair launch tokens, Vitali Dervoed, co-founder and CEO of Composability Labs, told Cointelegraph.
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Altcoins still in “speculative” early phase — analyst
Some altcoins may still catch up to HYPE’s performance during the 2025 altcoin season, which is imminent, according to some analysts, who suggest the altcoin market is still in an early “speculative” phase before it will stage a recovery to 2021 highs.
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The altcoin season has yet to come partly because memecoins have attracted a bigger share of investor capital and mindshare during the current cycle, according to Nicolai Sondergaard, research analyst at crypto intelligence platform Nansen.
Sondergaard told Cointelegraph:
“Altcoin season will still show up, but it may not be the same way people experienced it in previous cycles. We have way more tokens now, higher levels of dispersion.”
Meanwhile, crypto investor sentiment remains pressured by global trade war concerns following new import tariffs announced by the US and China.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
