Multicoin Just Made HYPE Its Largest Hedge Fund Holding. Is Hyperliquid a Buy After a 14% Monthly Drop?

Authoritative Financial News · Since 2006 AI Investor Podcast Menu Investing Personal Finance Technology Economy Politics AI Portfolio ❚❚ At close S&P 5007,743.50+0.49%Dow Jones52,649.00+1.16%Nasdaq 10029,694.00+0.37%Russell 20002,785.14+1.92% S&P 5007,743.50+0.49%Dow Jones52,649.00+1.16%Nasdaq 10029,694.00+0.37%Russell 20002,785.14+1.92% S&P 5007,743.50+0.49%Dow Jones52,649.00+1.16%Nasdaq 10029,694.00+0.37%Russell 20002,785.14+1.92% S&P 5007,743.50+0.49%Dow Jones52,649.00+1.16%Nasdaq 10029,694.00+0.37%Russell 20002,785.14+1.92% S&P 5007,743.50+0.49%Dow Jones52,649.00+1.16%Nasdaq 10029,694.00+0.37%Russell 20002,785.14+1.92% S&P 5007,743.50+0.49%Dow Jones52,649.00+1.16%Nasdaq 10029,694.00+0.37%Russell 20002,785.14+1.92% Cryptocurrency Multicoin Just Made HYPE Its Largest Hedge Fund Holding. Is Hyperliquid a Buy After a 14% Monthly Drop? Multicoin Capital just named Hyperliquid its largest hedge fund holding, yet HYPE keeps sliding. Before you treat that endorsement as a buy signal, there are several uncomfortable questions about what the announcement actually guarantees. ⧉ Quick Read Multicoin Capital named HYPE its largest hedge fund holding, but the token still sits 20% below its $98 September peak at $78. Hyperliquid's open interest nearly doubled in Q3 to $12.2B, approaching CME's $13.4B, while CFTC-approved regulated perpetual futures now threaten direct competition. Multicoin's public purchase adds no trading volume to drive HYPE buybacks, and only 22% of its 1 billion maximum token supply currently circulates. It sounds nuts, but SoFi is giving new Active Invest users up to $1,000 in stock for a limited time, and all it takes is a $50 deposit to get started. See for yourself (Sponsor) This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them. Multicoin Capital, a cryptocurrency investment firm managing $2.7 billion, has named Hyperliquid (CRYPTO: HYPE) its largest hedge fund holding, according to general partner Spencer Applebaum on October 19, 2026. Although Applebaum said the firm bought the tokens on the public market, he did not disclose the size of the investment. Despite this news, HYPE has not seen a price increase. As of October 20, the token trades at about $78, down 4% over the past week and 13.5% over the past month, and 20% below its $98 peak on September 23. So, does backing from a well-known fund give Hyperliquid a nudge upward? Multicoin’s investment gives it exposure to a decentralized exchange (DEX), a platform where on-chain code matches trades and securely manages user funds. Hyperliquid’s main offering is perpetual futures—contracts that track a cryptocurrency’s price indefinitely, allowing traders to hold positions as long as they provide enough collateral. Hyperliquid makes money through trading fees, and its Assistance Fund channels most of these fees into automated purchases of HYPE on the open market. As a result, demand for the token fluctuates with trading activity, making HYPE a proxy for the exchange’s overall performance. Martin Gaspar, senior crypto market strategist at prime broker FalconX, noted that Hyperliquid’s open interest—representing the total value of active futures contracts—nearly doubled in the third quarter, reaching $12.2 billion. This figure is approaching the $13.4 billion recorded by CME Group (NASDAQ: CME | CME Price Prediction), the Chicago derivatives exchange. Since FalconX profits more when derivatives trading increases, Gaspar speaks as an interested party. Gaspar also pointed out that open interest in futures beyond Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) rose 70%, suggesting traders are seeking leverage beyond the two leading cryptocurrencies, the market Hyperliquid has targeted to build volume. One of Hyperliquid’s main risks is its legal situation. The Hyperliquid Policy Center, which advocates for the exchange, submitted a comment letter to the SEC on October 19, asking for clarification on rules regarding airdrops, token buybacks, and secondary trading. The letter emphasizes the need for the SEC to clarify whether unregistered on-chain protocols can facilitate trading in tokens linked to investment contracts. The group’s letter stated, “Our comment asks the Commission to provide that clarity when the SEC adopts the rule, using the authority and tools the Commission already has.” Because buybacks help increase demand for HYPE, clear SEC guidance on these matters could reduce legal risk around the token’s main support. Meanwhile, competition for Hyperliquid’s primary product is intensifying in regulated markets. The CFTC has approved crypto perpetual futures for regulated U.S. exchanges, starting with a Bitcoin perpetual contract, while CME has filed a lawsuit challenging that approval. In a September motion, the CFTC asked a federal judge to dismiss CME’s lawsuit, arguing that any registered exchange, including CME, has the right to list similar products. If the CFTC prevails, U.S. traders may access perpetual futures on licensed platforms that would directly compete with Hyperliquid. Multicoin’s announcement does not commit the firm to any specific actions; it did not disclose details such as position size, entry price, holding duration, or lockup terms, allowing them to sell the tokens whenever they choose. Additionally, a publicly purchased token does not increase trading volume on Hyperliquid, and trading volume is essential for funding buybacks. The claim of being the “largest holding” may be less significant than it appears. Multicoin described HYPE as one of the top positions in its liquid fund in a June 2026 research note, so its top status could reflect price increases rather than new purchases. The $2.7 billion figure also includes client funds across the entire firm and does not break down the hedge fund’s specific share. Moreover, supply factors add further pressure. Currently, only 222.4 million HYPE tokens—about 22% of the 1 billion maximum supply—are in circulation, so future releases could increase selling pressure that buybacks need to manage.