Hyperliquid has seen a sharp increase in volume for equity-linked perpetual and pre-IPO contracts, as well as a drop in Bitcoin and Ethereum.
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- Block Scholes reports that the volume of Bitcoin and Ethereum futures contracts on Hyperliquid has fallen by a quarter or more as traders have increasingly turned to commodity and equity-linked contracts.
- SpaceX contracts have been the main drivers of this increase in volume.
- Block Scholes analyst Thahbib Rahman stated that speculative interests remain strong on markets like stock indexes perps and commodities as well as HYPE, despite a weaker sentiment towards Bitcoin and Ethereum.
Block Scholes, in a report that was shared with crypto.news by Block Scholes on the 5th of June, reported that the risk sentiment surrounding the two biggest cryptocurrencies had continued to weaken even though speculative interest remained active across the rest of the market.
Researchers at the firm cited their own Bitcoin and Ethereum Risk Appreciation Indexes that have fallen in recent weeks along with both asset declines.
A number of market events have coincided with recent declines in the crypto-majors. Block Scholes reported that Strategy had sold $2.5million worth of Bitcoin, after Executive Chairman Michael Saylor publicly committed to continuing the accumulation of this asset.
Report also highlights longest outflows for U.S. Bitcoin spot ETFs.
Block Scholes believes that the trading activity in the digital assets market has shifted to a new set of instruments.
Stock and commodity linked perpetuals are a popular choice for traders
Hyperliquid’s data indicates that the daily volume of Bitcoin perpetual futures has been around $2 billion. Ethereum volumes, however, have hovered between $600 and $700 million. Block Scholes has described these levels as being at multi-quarter highs.
The platform has seen a rapid expansion of activity related to commodity and equity markets. According to Block Scholes, the three most actively traded non-crypto perpetual contracts on Hyperliquid are XYZ100, which tracks the Nasdaq-100, SP500, an S&P 500-linked product, and CL, a contract tied to WTI crude oil.
The combined daily trading volume of these three markets reached $1.3 billion. This generated $27.1 billion worth of notional volume in the last month. Block Scholes stated that this total is equivalent to approximately 112% Ethereum permanent volume, and about 38% Bitcoin perpetual volume at the exchange over the same time period.
According to the report, this development is not necessarily a dollar for dollar migration of capital away from Bitcoin and Ethereum. Report argues that the attention of traders and the speculative behavior that supported cryptocurrency majors in the past are being increasingly focused on alternative markets, available via the same trading venue.
Pre-IPO Contracts Draw Growing Interest
Block Scholes has identified pre-IPO permanent contracts, in addition to commodity and stock index products as an area that attracts crypto-native investors.
The report states that the pre-IPO volume ratio relative to Ethereum volume has increased in the last few weeks from a low of 0.1% up to a high near 3.0%. The daily trading volume has increased from $5 million to $50 million. Contracts linked to SpaceX are responsible for most of this increase.
Block Scholes reported that Bitcoin and Ethereum volumes were subdued, but the activity had accelerated in late May and into early June.
Risk appetite data from the firm also revealed a divergence between digital assets. Block Scholes reports that while sentiment towards Bitcoin and Ethereum is waning, Hyperliquid’s token HYPE remains one of few crypto assets whose risk appetite indicator has continued to rise.
HYPE risk appetite index. Source: block Scholes
As earlier reported Binance Research, a research firm recently reported by Crypto.news that capital had been moving towards a group of concentrated U.S. stock sectors. These included artificial intelligence infrastructures, semiconductor firms, defense contractors and energy companies.
According to this report, historically strong performance of these sectors has reduced the liquidity available for Bitcoin and other alternatives assets.
Binance Research used the CBOE Dispersion Index (as a measure for market concentration) and noted that this indicator reached 42 recently, the third highest value ever recorded. According to the company, periods of concentrated equity leaders have frequently coincided in Bitcoin weakness as investors divert funds towards a small group of highly-performing themes.
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Source: crypto.news
