Key Takeaways

• A major HYPE token holder, or “whale,” has withdrawn $122 million in tokens, realizing a significant profit ahead of a massive vesting schedule set to begin in November.

• The upcoming vesting event, which will unlock nearly $12 billion in HYPE tokens over 24 months, is seen as the “first true test” for the token’s price resilience.

• The whale’s exit, which follows a similar move by BitMEX co-founder Arthur Hayes, signals a shift in sentiment among large investors concerned about a potential supply overhang.

A large Hyperliquid (HYPE) whale has moved to the sidelines, withdrawing $122 million in tokens from the decentralized exchange.

The whale, identified by their wallet address “0x316f,” is sitting on an impressive $90 million in unrealized profit and is now likely “selling for profit,” according to blockchain data firm Lookonchain.

The Sword of Damocles: A Test for HYPE

In the world of crypto, a vesting schedule is a pre-determined plan for the release of locked-up tokens over a set period. However, as the unlock date nears, the prospect of a massive new supply entering the market can create significant sell pressure.

This event has been described by Maelstrom, Arthur Hayes’s family office fund, as a “Sword of Damocles” moment for HYPE. The Sword of Damocles is a metaphor for a constant and imminent peril. In this case, the peril is the potential sell-off of over $11 billion in HYPE tokens that will be unlocked for core contributors over a 24-month period, starting on November 29.

While a portion of this new supply may be absorbed by buybacks, Maelstrom researcher Lukas Ruppert notes that this could still leave about $410 million in monthly supply overhang, creating a persistent downward pressure on the token’s price.

HYPE’s Momentum Stalls as Whales Exit

The whale’s exit follows a similar pattern seen in the actions of influential figures like Arthur Hayes, who recently sold his entire HYPE stash, reportedly to fund the deposit for a new Ferrari 849 Testarossa.

As whales exit, other large investors appear to be shifting their attention to a competing platform. Hyperliquid’s main rival, Aster, a decentralized perpetuals exchange linked to Binance co-founder Changpeng Zhao, has seen a surge in interest and price.

One whale address, “0x220,” recently bought $10.5 million worth of Aster tokens, a move that contributed to the token’s 1,700% surge over the past week.

Final Thoughts

The withdrawal of a major whale from the Hyperliquid ecosystem is a clear signal of market concern ahead of its first major token unlock. This vesting event will serve as a crucial test of HYPE’s long-term viability and its ability to withstand significant sell pressure, forcing investors to re-evaluate its future prospects.

Frequently Asked Questions

What is a token vesting schedule?
A token vesting schedule is a pre-determined plan that outlines when and how locked-up cryptocurrency tokens will be released to their owners, such as founders and early investors, over a set period of time.

What is a “whale” in crypto?
In cryptocurrency, a “whale” is an individual or entity that holds a large amount of a particular digital asset, and whose transactions can significantly influence the market price.

What is the “Sword of Damocles” in finance?
The “Sword of Damocles” is a metaphor used to describe a precarious situation with a sense of impending doom, often used to refer to a potential future event that could cause significant financial peril.