HYPE token surged 12% on Monday after Coinbase officially activated its role as the official USDC treasury deployer on Hyperliquid, marking a significant development for the platform's token buyback prospects. According to Coinbase's June 8 announcement, the exchange has activated the AQAv2 framework through two designated treasury wallet addresses, taking over deployment responsibilities for Hyperliquid's USDC reserves. The framework routes most of the yield generated from Hyperliquid's USDC treasury back into the protocol's ecosystem, with Coinbase previously stating the arrangement could increase Hyperliquid's annual revenue by up to $200 million. Because Hyperliquid allocates up to 99% of protocol revenue to HYPE buybacks through its Assistance Fund mechanism, higher protocol revenue could significantly increase the amount available for token repurchases.
The Coinbase activation comes less than a month after the exchange announced it would become Hyperliquid's official USDC deployer and revealed an increase in its staked HYPE holdings. On-chain data from HypurrScan shows that one of the newly activated Coinbase treasury wallets already holds more than $32 million worth of staked HYPE, while a second wallet associated with the deployment had not recorded any transactions at the time of writing. Hyperliquid data shows the platform generated $29.5 million in fees and $24.07 million in revenue last week, its strongest revenue performance since early February. The token had been trading around $64 on June 8 after rebounding from an intraday low near $57, recovering much of the decline triggered by last week's crypto market liquidation event, though it remains below its recent all-time high of approximately $75.48.
Technical indicators showed signs of recovery as HYPE rebounded from support around $55.5 and broke back above a descending trendline that had capped prices since the recent all-time high. The move pushed HYPE above key Fibonacci retracement levels near $59.8 and $63.2. Momentum indicators have turned more constructive, with the MACD producing a bullish crossover and the Aroon indicator pointing to strengthening trend momentum after recent highs began forming again. According to crypto trader Owl Prints, Bitcoin's correction was absorbed near trendline support and the $54.79 horizontal support zone, while the recovery above $62.69 suggests buyers have regained control of the market, with the trader noting that "Bulls are in control again."
According to DefiLlama data cited by The Economic Times, Hyperliquid accounts for more than one-third of total revenue distributed to token holders across 855 tracked protocols. The platform's business model is designed to create demand through token buybacks, with nearly all fees from spot and perpetual trading markets used for token repurchases, excluding builder and unit fees. Activity across the Hyperliquid ecosystem has continued to expand, with USDC serving as the collateral asset for HIP-3 and HIP-4 markets, while Trade.xyz, a HIP-3 platform built on Hyperliquid, recently recorded $16.18 billion in weekly trading volume. Additional support has come from Kraken's recent launch of HYPE staking, which provides holders with another way to earn yield, while the platform's native token HYPE has recently surpassed Dogecoin (DOGE) to enter the top 10 cryptocurrencies by market value.
Despite the improving technical picture, traders continue to monitor risks stemming from the UK Financial Conduct Authority's recent warning regarding Hyperliquid-related activity, alongside concerns about future token unlocks and valuation levels. The token's rally also came hours after speculation emerged that a wallet linked to BitMEX co-founder Arthur Hayes had accumulated nearly $2.1 million worth of HYPE following last week's correction, though Hayes later denied re-entering the position. Hayes had been facing criticism from community members since last week, when he liquidated his entire HYPE position worth roughly $18 million, following just days after the trader predicted the token could reach $150 by year-end. While proponents view this as a 'Gen 2' crypto model linking economics to token value, it remains uncertain whether the rally reflects sustainable fundamentals or advanced momentum trading, with the platform facing regulatory pressure from CME Group and Intercontinental Exchange reportedly urging officials to regulate Hyperliquid.
