Trader Loses $42M Shorting HYPE as Hyperliquid’s Price Surges to New Highs

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<a href="https://jpykr.com/hype-usd/">HYPE</a> Hits New All-Time High as Trader Turns $42M Profits Into Loss

A trader lost $42 million in potential profits over 18 days by betting against HYPE on Hyperliquid. This loss comes as Hyperliquid’s price has dramatically increased, reaching record highs.

I was really impressed with Loracle – they spent almost ten months building up $42.2 million in profits from perpetuals trading. It felt like a huge accomplishment! But then, unbelievably, a single bad trade – a short position – completely erased all of those gains in just 18 days. It was a harsh reminder of the risks involved in this market.

Lookonchain, a platform that analyzes blockchain data, pointed out a significant loss for a trader. After initially profiting, the trader ultimately lost an extra $5.19 million due to a large bet against HYPE, the token used on Hyperliquid. The price of HYPE didn’t move as the trader expected, leading to the loss.

Related reading: 

HYPE Hits New ATH Above $67 as OG Wallet Sells Big

Loracle’s HYPE Short and the Cost of Betting Against the Rally

A trader named Loracle (known as loraclexyz on the blockchain) made a large bet that the price of HYPE would fall, using the Hyperliquid platform. However, the price of HYPE unexpectedly rose sharply, reaching a record high of $73.73, resulting in a loss for the trader.

Lookonchain drew parallels between the current situation and past incidents involving traders James Wynn and Machi Big Brother.

However, people following the community disagreed with that comparison. Data from blockchain tracking tools shows that Loracle controls over $107 million in current assets, with the majority held in HYPE.

Based on the situation, it appears the short sale was used to reduce risk from existing holdings rather than a bet on price direction. Loracle has largely exited the position, but still holds a short position in 843,232 HYPE tokens, currently valued at approximately $61.4 million.

loracle.hl(@loraclexyz) has become the next @JamesWynnReal and @machibigbrother!

As a researcher tracking crypto markets, I observed a trader accumulate $42.2 million in profits from perpetual contracts over almost ten months. Unfortunately, a large short position on $HYPE quickly reversed his gains, erasing all profits and ultimately leaving him with a loss of an additional $5.19 million in just 18 days. It was a dramatic shift in his portfolio’s performance.

He has now closed most of his $HYPE short, but…

— Lookonchain (@lookonchain) June 1, 2026

According to CoinGecko, HYPE is currently trading at $72.32, a 5.74% increase in the last 24 hours and a 14.23% increase over the past week. It has recently become one of the top 10 cryptocurrencies by market value.

Hyperliquid’s Revenue Engine Is Driving the Price Action

Crypto analyst 0xc06 on X took a closer look at what is actually pushing HYPE higher. 

The analyst observed that HYPE increased by approximately 24% in a week, while the overall crypto market decreased by about 3% during the same time. They explained that such a significant difference in performance compared to other similar investments usually indicates more than just positive feelings or ‘hype’.

As a crypto investor, I’ve been keeping a close eye on Hyperliquid, and the numbers are really impressive. They’re currently on track to generate around $1.3 billion in fees this year. Last year, which was their first full year with significant growth, they actually brought in about $822 million in revenue. It’s definitely a platform to watch!

Hyperliquid consistently generates over $1.3 million in daily fees, often exceeding $1.6 million on its busiest days. In 2025, the platform saw approximately $2.6 trillion in trading volume, nearly double the amount processed by Coinbase during that same time.

Hyperliquid generated more fees than Ethereum, Solana, and Tron separately during the same period. This means a single application earned more than the underlying blockchains it relies on.

$HYPE tagged $73.79.

It hit a new record high, increasing around 24% this week. In contrast, the overall market has fallen by about 3% during the same period.

Let’s break down the revenue engine behind @HyperliquidX

◢ Green While Everything BleedsThe lazy read is “strong token, strong…

— Onur (@0xc06) June 1, 2026

The Buyback Program Removing 14% of Supply Each Year

The analyst determined the main reason HYPE’s price has been changing. Hyperliquid directs nearly all the fees it collects – 97% – into a fund called the Assistance Fund. This fund then automatically purchases HYPE on the market daily, without requiring any action from the Hyperliquid team.

The program has facilitated over $1.3 billion in purchases so far. It currently owns approximately 28.5 million HYPE tokens. According to analysts, the buyback process reduces the available token supply by nearly 14% each year.

Based on its market value, this equates to about 7% annually, which the analyst noted is four to five times more aggressive than similar actions with cryptocurrencies like Ethereum (ETH) or Binance Coin (BNB).

This system works like a company buying back its own stock, but it happens directly on the blockchain and is always running. However, one major concern is that its success relies completely on how much trading activity there is.

If user activity declines sharply, it could lead to lower fees, fewer buybacks of the token, and ultimately, a price decrease. Additionally, around 9.9 million HYPE tokens will be released on June 6th, increasing the available supply at the same time the buyback fund is actively purchasing tokens.

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2026-06-01 14:38