Taiwanese music star and notable cryptocurrency investor Jeffrey Huang, commonly referred to as “Machi Big Brother,” has divested all of his Hyperliquid (HYPE) holdings for a significant loss of $4.45 million. The decision comes as concerns grow regarding the token’s impending vesting schedule, which has raised questions about HYPE’s resilience in the market.
According to blockchain data shared by the pseudonymous analyst MLM, Huang sold approximately $25.8 million worth of HYPE tokens after holding them for a few weeks. In addition to the realized loss, Huang has also watched over $19 million in potential unrealized profits evaporate within the last week alone. Despite these setbacks, Huang retains a substantial long position in Ether (ETH), valued at over $117 million, and holds approximately $28.4 million in Pump.fun (PUMP) tokens.
The sale of HYPE tokens by Huang followed a notable withdrawal by a significant whale investor, who removed $122 million in HYPE from circulation. This large withdrawal sparked concerns about the token’s ability to manage supply pressure, as profitability strategies begin to surface within the community.
Market analysts have pointed to looming challenges as the HYPE token faces its “first true test” when the 24-month vesting schedule will begin on November 29. This vesting period is set to release an overwhelming $11.9 billion worth of tokens to team members, with ongoing buyback efforts anticipated to only absorb about 17% of the monthly supply, potentially leaving $410 million in excess tokens in circulation. Research published by Maelstrom, the family office fund tied to BitMEX co-founder Arthur Hayes, emphasized these concerns which appeared shortly after Hayes liquidated his own HYPE holdings, reportedly to fund the down payment on a new Ferrari.
The anticipated challenges come as Hyperliquid’s market share in the decentralized exchange (DEX) sector has plummeted. Recent data from Dune indicates that Hyperliquid now accounts for only 33% of DEX market share, a stark decline from 65% in mid-July. This shift reflects a broader competitive trend within the DEX ecosystem, with increasing numbers of platforms emerging to capture user interest.
Sarah Song, the head of business development at BNB Chain, remarked on this evolving landscape, stating, “As the sector evolves, new models might lead to significant changes in user behavior and platform dynamics.” She underscored the importance for DEX protocols to address foundational issues such as sustainable liquidity, varying collateral types, product design, and the efficacy of the underlying blockchains in order to achieve widespread mainstream adoption.
In contrast to Hyperliquid’s decline, competitors like Aster and Lighter have seen remarkable growth. Aster’s market share skyrocketed from 1.3% to 20%, while Lighter experienced an increase from 12.8% to 17.1%. The decentralized perpetuals exchange Aster also briefly exceeded $2 billion in total value locked following the launch of its new native token, ASTER, showing strong potential in a rapidly evolving market.
In terms of price performance, the HYPE token reached an all-time high of $59.29 earlier this week, shortly after Binance co-founder Changpeng Zhao featured the ASTER token. However, HYPE has since dropped to around $48.20, representing a decline of roughly 9% for the week.
As the decentralized finance (DeFi) sector continues to mature, it remains to be seen how these dynamics will play out for investors like Machi Big Brother and what strategies may emerge to navigate the turbulent waters ahead.
