Why Hyperliquid Jumped Another 11.6% on Tuesday

The Hyperliquid (CRYPTO: HYPE) cryptocurrency is surging. As of this writing at 10:40 a.m. ET on Tuesday, it's up 11.6% over the last 24 hours. It has also gained 24% in a week and 76% in a year. With an $18.8 billion market cap, it's the ninth-largest cryptocurrency on the market today.

What is Hyperliquid and why is it soaring?

Hyperliquid in 60 seconds or less

Hyperliquid is a blockchain built specifically for financial applications. Its developers call Hyperliquid a purpose-built infrastructure for trading valuable assets on a fast, low-cost blockchain ledger.

The project wasn't funded by private capital or stock sales, giving Hyperliquid a ton of financial freedom. Now, self-funding doesn't automatically make a project more trustworthy or decentralized. It just changes who holds the early tokens and benefits from the cryptocurrency. Still, there's no pressure from shareholders or bankers on Hyperliquid founder and lead developer Jeffrey Yan.

The coin runs on a high-performance blockchain focused on trading assets and futures. Its decentralized trading system often ranks among the 10 highest-volume platforms, challenging longtime leaders Uniswap (CRYPTO: UNI) and PancakeSwap (CRYPTO: CAKE).

Today, Hyperliquid jumped on actual news. Asset manager Bitwise bought 77,100 Hyperliquid tokens on the open market to reflect a $5.2 million investment in the Bitwise Hyperliquid ETF (NYSEMKT: BHYP) fund. The largest Hyperliquid ETF now has $97 million of assets under management, and has gained 65% since its inception a month ago.

Image source: Getty Images.

Is Hyperliquid worth the risk?

Is Hyperliquid a buy today? That depends on your appetite for crypto volatility and your belief that the financial system needs a blockchain-powered upgrade.

Hyperliquid has real usage metrics behind the meme-style ticker symbol and low-pressure financing model. The platform processes billions in daily trading volume, generates over $1 billion in annualized fees, and third-party developers have earned $65 million building on its infrastructure. That's a real business.

But a single-day jump of 11% also invites sudden price drops, and Hyperliquid has seen a few of those. Traders are fickle and Hyperliquid is still much smaller than sector leaders Ethereum (CRYPTO: ETH) and Solana (CRYPTO: SOL).

Hyperliquid could be the future of finance. It might also be a short-lived footnote in the history books. Aggressive investors could build a modest position in this risky coin, but I don't recommend betting the truck. What rockets up can crater down.

Anders Bylund has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Ethereum, Hyperliquid, Solana, and Uniswap Protocol Token. The Motley Fool has a disclosure policy.