Hyperliquid [HYPE] is undervalued relative to ETH, SOL – Crypto VC

• A crypto VC claimed that HYPE could be undervalued at current levels. 
• The broader market rout has exposed HYPE to a 50% decline. 

Hyperliquid [HYPE] is massively undervalued relative to Ethereum [ETH] or Solana [SOL] at the current values. This was the argument made by Ryan Watkins, Crypto VC partner at Syncracy Capital. Watkins said, 

“(Hyperliquid) is the dominant decentralized derivatives exchange with 60%+ market share; it is also the highest earning blockchain today behind Solana and Ethereum. Yet $HYPE trades at the lowest multiple of its peers.”

The chart shared by Watkins showed that Hyperliquid was amongst the top three chains from a fee perspective. Hyperliquid, which operates as DEX and a layer 1 blockchain, had annualized fees of $577M, slightly above Tron [TRX]. 

HYPE’s potential

In his HYPE thesis, Watkin mentioned that Hyperliquid could rival centralized exchanges like Binance. In particular, in the perpetual market, the new player has gained a massive share since late 2024. 

So, what impact do these have on HYPE? Watkins noted that the strong growth and earnings ($200 million) have allowed the team to drive an aggressive buyback program, which could be a net positive for the HYPE. He added, 

“This not only provided strong incentives for recipients to hold rather than immediately sell, but also created strong buying pressure for HYPE as the fees fueled large scale buybacks.”

However, the current price action didn’t lean heavily on the bulls’ side. HYPE was down 50% from its December highs of $35 and was trading at $17, at press time. 

Since late February, the daily RSI had been toiling below a neutral level, reinforcing a relatively undervalued token and high selling pressure.

If broader market sentiment weakens further in the short term, HYPE could drop to $12-$14 support (bullish order block) or $10. 

Conversely, a jump above $20 would flip its market structure bullish and tip bulls to push higher.