Major Crypto Hedge Funds Queue $150M in HYPE Withdrawals, Triggering Market Slump

Significant Withdrawal Pressure Mounts for HYPE

The HYPE token experienced notable selling pressure following announcements that three prominent cryptocurrency hedge funds have initiated the process of unlocking substantial quantities from staked positions. Multicoin Capital, Selini Capital, and Galaxy Digital collectively signaled their intention to withdraw approximately $150 million in HYPE tokens through the standard unstaking process. The withdrawal announcements triggered an immediate market reaction, with the token declining 8% from its local highs, briefly testing $58 before recovering to trade around $59.19 as of the reporting period.

The specific breakdown of these withdrawal requests reveals the scale of positions involved. Multicoin Capital holds approximately $138.78 million in staked HYPE, with roughly 83% of that amount—approximately $116 million—currently sitting in pending withdrawal status. Selini Capital has queued $4.4 million for withdrawal, while Galaxy Digital has indicated its intention to unlock $29.4 million. Adding another layer of concern for existing holders, a wallet associated with Multicoin transferred roughly $11.2 million worth of HYPE to a major centralized exchange, an action that often precedes selling activity.

Liquidity Mismatch Raises Market Concerns

The primary driver of market concern stems from a fundamental disparity between the scale of pending token unlocks and the depth of available trading liquidity in spot markets. While HYPE perpetual futures demonstrate substantial daily volumes exceeding $400 million, the underlying spot market operates at a fraction of that scale. Analytics obtained from Block Liquidity show that over a 28-hour period, HYPE spot trading volume reached just $72.8 million across approximately 1,463 unique buyers and 982 sellers. The pending $150 million in token unlocks represents nearly twice this volume, and these withdrawals will process over a five to seven day window.

This mismatch creates what traders refer to as an “overhang”—potential selling pressure that can weigh on prices regardless of fundamental changes. The dynamic has not gone unnoticed, contributing to HYPE’s 11% decline over the preceding week. The critical question now centers on whether these funds intend to deploy tokens immediately into the spot market or whether alternative uses for these assets exist within the ecosystem.

Unlock Catalysts and Recovery Prospects

Investigation into the reasons behind these withdrawals suggests that not all tokens may be destined for immediate market sales. Selini Capital’s unstaking appears directly connected to the operational shutdown of a perpetuals market operating on the Hyperliquid platform. HIP-3 protocol deployments require market operators to stake 500,000 HYPE as a forfeitable security deposit, refundable only upon market closure. The DreamCash perpetuals market that Selini operated faced difficulties attracting sufficient trading activity, limiting its viability.

Multicoin Capital’s position may similarly remain within the Hyperliquid ecosystem rather than exit through sales. The firm recently led a $1.75 million seed investment round into Trasia, a platform designed to bring non-custodial trading for Asian equities to the Hyperliquid network. Tushar Jain, Multicoin’s managing partner, directly addressed market concerns, stating that the unstaked HYPE was not designated for sale. The coming week will reveal whether token flows align with these statements, or whether market liquidity receives the testing it has been anticipating.

Source: Block Liquidity, via Cointelegraph. Not financial advice.