David Schamis: HYPE Is The Best Asset In The World (Bull Thesis)

Transcript

All right, you guys. We are back here in the tokenization tower with David Shamus, CEO of Hyperliquid Strategies following a huge update from them today following a Knicks win. David, what a game. >> a hell of a game. [laughter] No doubt. I wish I could say I didn't fall asleep, but I >> Man, you guys had You guys had a huge announcement today bringing the shares of per Hype Holdings 26.2 million total Hype added 2.5 million Hype tokens last week getting up to about 2 and 1/2% of the supply or so. 210 million share count. You issued 22 million new shares last week. 199 million in cash.

So, you added $50 million in cash while also buying $150 million of Hype last week. Total like your average entry is about that I've got it on 31 here, but I think last week it was closer to 39. >> Yeah, it's come up. It's definitely come up. Yeah. >> Yeah. >> I'd love to be able to buy in the 20s like I was in in January, but I can't be doing that now. >> Yeah. >> Uh so, yeah. Look, we we've had a nice MNAV for a while. Uh and generally speaking, you know, when Hype's moving in the right direction, which it had up until I don't know a week ago or so, uh we're able to use that MNAV to issue stock and just run the playbook. Like it's not complicated. Uh we run the DAT playbook.

>> Yep. >> Um we try our best not to pretend to market time because when you try to do that, you get it wrong more than you get it right cuz we're all humans. So, we try to be as disciplined as possible. Um and it's basically been working. Now, obviously, as you said, the average price our average price overall has gone up. That's okay. That's supposed to happen. Um and you know, we're a bigger and bigger percentage of the total. Uh which feels good. I think the the we're 26 or something million tokens right now. >> Yeah. >> Uh and the circulating supply is 200 or so million. So, we're actually about like 10% of the of the circulating supply, a little more.

>> Yeah. >> So, that feels really good to us. And as far as I'm concerned, uh when you look at our MNAV, on one hand, we're at that sort of decent level and it's pretty volatile. So, there have been points where it's higher or lower. Last I checked like before I left the office, you know, when you add back the DTL, we're still hovering around one or a little bit of slightly above one. >> Yeah. >> So, like as an investor, you know, it's pretty easy to invest in this if you want to get hype exposure because like it's not a ridiculous price you're paying. >> Yeah. Yeah. Yeah. I've got it at 1.12x MNAV as of live on that hl.eco site.

>> You know >> Well, I don't know. I think that is with that is with deducting the deferred tax liability. I think if you add it back, it's I don't know. I don't have it in front of me, but it's probably 1.02 or something. >> Got it. >> Um and you know, that liab- We only pay that liability is if if we have to sell tokens. If we never sell a token, we never pay that tax. >> I I take it you guys aren't planning on selling any tokens. >> We are certainly not planning on selling any tokens. Uh we have as per this announcement, you know, close to $200 million of cash >> Right.

>> on our balance sheet. On the other hand, I want to be really clear. Like I'm not Michael Saylor. I'm not a zealot. You know, our job uh in the end is to create as much shareholder value for our shareholders as possible. And if the circumstance came where we needed to sell tokens to do that, we would do that. >> Yeah. >> Like we're not we're not religious zealots. We're corporate finance geeks and I'm I'm proud of that. I was at a I was at a dinner 2 weeks ago. I'm not going to mention any names. I was at a dinner 2 weeks ago. It was it was a dinner about per and hype. >> Yeah. Yeah. >> And there was probably I don't know eight or 10 people in the room and I said what I just said to you guys.

>> Yeah. >> And one guy was like, "I'm out of here." And literally I in the appetizer course, he gets up and leaves. I'm like, "What what are you going?" He's like, "I would never invest in anyone that would ever sell a token." I'm like, "Okay, that's fine. No no problem. Uh I said there were plenty of crypto zealots out there that you can find who will would to take your money." But, like you know, we're we're we're super long and super bullish hype. But, we're not you know, we're not religious zealots.

>> Yeah. Anyway, I didn't mean to go off track, but it's >> No, that's a that's a hopeful story to kind of paint the picture that there are zealots out there like like you said and There's no shortage of religious zealots in the crypto world. No shortage at all. >> Um is there a target amount you know, we've heard 5% tossed around out there is like the target percentage of the supply that some of these daps want? Is that a similar number do you have in mind a target? >> So, let let's think of talk about this. So, the circulating supply right now, I don't have these numbers exact, but off the top of my head is 200 20 or 240 some odd tokens in total. When we think about, you know, what's the total tokens outstanding that would equate to the shares outstanding of a public company,

we think the number's like 477 million. And we're actually going to be upgrading our website pretty soon. That's one thing we're going to be adding, which is, you know, our version of what we think equates to shares outstanding of a public company. And that 477 is basically circulating supply plus the unvested unlocked stuff that the team has cuz they're going to the those people aren't quitting their jobs, right? They're that's going to vest over time. It's going to unlock. And that equates to about 477 million right now. So, if you think of our 26 or whatever the number was divided by the 477, you know, we're a little more than 5%.

Um I there's no like I have no uh limit as to where I think that number should be. 100 would seem strange to me. >> [laughter] >> But, you know, um we're happy to keep increasing that as the market permits. >> Yeah. And so, when you guys issue new shares like you did last week and you announced it this week, um there's there's like couple things happening here. There's a separate credit facility that you guys can access that I believe you haven't quite accessed yet. >> No, we have. We have. So, so let me explain that cuz it is um unnecessarily confusing.

>> Yeah. >> Uh there's something called an E lock, equity line of credit. >> Yeah. >> All an E lock is is for a company that is less than 1 year old, which is what our company is. Which means you're not S-3 eligible. So, if you're less than 1 year old, you're not S-3 eligible, you can't do a normal ATM that lots of companies do. >> Uh >> So, because we can't do a normal ATM, we have to do an E lock. And frankly, the only practical difference is there is like more fees in the E lock than there is in the ATM. So, once we get to 1 year, which is December 2nd, not that I'm counting, >> Yeah.

>> um we'll be able to file an S-3, then we'll be shelf eligible, which means we can do regular ATMs, and it'll really look and feel exactly the same. It'll just cost us a little less money. >> Yeah. >> Um now, the only caveat to that is there has been some announcements from the SEC that they might be actually getting rid of that 1-year rule. So, it might be that we miss that cuz we'll be 1 year in December, or maybe we'll catch the tail end of that where we'll be able to be S-3 eligible earlier, which would be great. But, the So, the E lock, we have tapped it.

>> Yeah. >> Um I don't know the exact number, 400 some odd million in total out of the billion we've done, but we can obviously there's ways to extend that and all that. So, like it's not like that's some hard limit that we'll never go above. >> And so >> But, but we have done that, and I think people have gotten confused cuz it's got a funny name, equity line of credit. It's just an It's just an ATM in a different form. >> Got it. And so, when you issue those new shares, is that what you're Is that what you're able to tap the credit line on? Is the total shares that that you guys own, or when you issue those shares, you're then selling those shares to buy more Hype Interface cash?

>> Yeah. So, again, don't don't get caught up in the term equity line of credit. Like it's just an ATM where where or ATM-like. You know, we're selling those shares to the market, we're taking in cash every day. We use those shares to buy more hype. And then, you know, between this week and last week, we also retained some cash. >> Yeah. >> Um you know, you'll see that'll change next week or whatever, but um yes, it's just literally cash comes in the door every day that we sell stock. We take that cash and we invest in hype. >> Yeah. >> Yeah. >> It's not a not a complicated business model. >> No. No. It makes sense and it's easy to understand. And so, you know, we read off some of the numbers. Um and we also kind of talked about the MNAV, which is

hovering around that, you know, one one two one >> Yeah. >> three mark and and you mentioned, you know, DTL kind of brings that down to closer around one. The the model makes a ton of sense when the MNAV is high. You ATM E-Lock, you know, effectively you issue shares, use that cash to to, you know, keep cash on the balance sheet and use it to buy hype. When the MNAV is closer to one, >> Yeah. >> is there anything like what what is there to do because it's not the prime conditions to go ATM E-Lock? So, what what do you do when the ATM is or the MNAV is around one?

>> So, specifically around capital management, right? Cuz there's more things that companies do than capital management. But in this regard, around capital management, let's just say for argument's sake we're hovering around one, I think the right answer to do is to do nothing. >> Okay. >> And the key is you want to be in a position so you don't have to do anything. Um you know, my former boss, Chris Flowers, uh one of his great lines used to be that, you know, more times than not, the right thing to be doing is playing squash. >> Yeah. >> Which means like just because you come to work and you get dressed up, don't think you have to do something to add value. Sometimes the right thing to do is to play squash or to go to the beach or whatever. So, you know, look, and and but my point is about having cash,

right? Like if you're a DAT like a lot of them we've seen who are on the edge of cash and are running out of cash, they're actually forced to do unnatural things. >> Mhm. >> Right? So, like I think it is super unnatural for a DAT to be selling calls against their tokens. >> Yeah. >> But we've seen a lot of them. And I literally I probably get three or four calls a week from, you know, sort of crypto option dealers out there who are shocked to hear that we're not selling calls, and they tell me how every other dad I know is does that all the time. >> like, I understand if you're trading at whatever a 0.95 MNAV or a 0.9 MNAV, and you're running out of cash, well, you have to do it. Right? Like, you're too high to liquidate, but you're too low to

issue stock, and you got to keep the lights on. But, you know, we've worked hard A to have plenty of cash, we don't have to worry about that. B, we have four employees, including myself. So, we keep the expense burning light. You know, we we sublet office at Atlas Merchant Capital, my private equity firm. We don't have our own office and our own fancy stuff. We keep the the burn really light. And I think that those are unnatural things to do, selling token selling selling calls against your tokens. Some people say we should we should be selling puts. Like, there's lots of things you can do. Uh it's all sort of interesting and entertaining, but unless we thought we were getting really good value, we wouldn't do it. Uh the other thing we hear a lot about, and maybe, you know, you know, people call me all the time

and say you should be doing converts, you should be doing debt. >> Yeah. >> We've done none of that. I'm not I'd never say never. If we think there's real value, you know, debt markets do crazy things all the time. So, being on the other end of crazy things is a good thing to do. Um on the other hand, like, you know, unless we thought the economics were really really, um you know, sort of interesting, the we don't we don't have to fill our day doing those things. Just doing nothing's okay. >> Yeah. You know, before you or after our last show, we had this slew of announcements that were hitting. So, you were on the show, Hyper was trading like 38, 39, 40 was kind of right around where we were talking about your break even, and then all of a sudden we get this Coinbase and

Circle announcement where the 6 billion, give or take, of USDC on Hypercore, um there was a deal that was struck that is 90% of that revenue going to hyper liquid to the assistance fund for buybacks. And there's an amazing site HL equals slash stables that shows based on the interest rate which is around like the 3 3.25% now. That's an additional 175 to 200 million dollars a year in buybacks of hype just because they were able to secure that deal. And that part of the thesis was not part of the thesis. We were just talking about HIP 3 3 billion dollars of OY, huge kind of game changing moment

for the industry. But now you add on to add this on. From the regulatory side, from the economic side, just give us how this is evolved the hyper liquid thesis from your perspective from you know mostly those two angles. >> Look, those are two big big ones. You know, on on USDC and by the way, I'm a Circle shareholder as a firm at Atlas Merchant Capital. We were investors in Circle. So I have two hats on this one. But I will tell you it's a really amazing example of when you have sort of power when you have power to be able to move pricing how it really works. And you know, when I've talked this story about what went on between Circle slash Coinbase and and hyper liquid, I dramatize a little bit.

I actually wasn't in the middle of it. I found out about it the same time you did. So it's not like I have any inside info here. But you know, I get the impression that sort of last fall or so hyper liquid said to the USDC people, you know, we have all this USDC on hyper liquid. We should be getting a cut of it. And they said no. So hyper liquid did USDH its own token. It's own stable coin. And the amazing part about it was, you know, from then until whatever it was a month and a half ago USDH got some traction. It wasn't blowing the doors off by any stretch. I mean, the last number I saw which was like, you know, 100 million or so. I'd say you not exactly cutting into USDC in a big way and somehow just doing that

got the 100 got got the 90/10 deal. Which was pretty amazing. I don't know what deal would have been acceptable back in September for the team. Maybe more, maybe less, I don't know. But it it shows you, you know, Circle clearly does not want to lose one nickel of reserves. Now, I don't blame them by the way. Like they're still very much in the growth mode. And they want to see that moving in that in the right direction. So, I understand why Circle Coinbase did it and I think it was a it was an sort of the way I see it, it was like a eight or nine month negotiation from Hyperliquid and then that was they did a hell of a job negotiating.

>> And then from the regulatory side, from the economic side, what is this change about the thesis from from your perspective? >> Well, as you say, I mean, you know, the day it was announced it was a 175 or 200 million dollars sort of plateau up in in revenues that go, you know, right to the bottom line to the assistance fund. It's super meaningful. It's not it wasn't, you know, a 3% change. It was a material change. And there's a reason the token moved what it did. The most interesting thing actually, if you literally go and find out when that announcement was and you look at where the token, it didn't like react immediately. Yeah, it took a day.

It took a day or so. And it what that shows you is like, you know, we all, you know, everyone in this room is sitting there looking at their screens 24/7 and watching Twitter and super focused on on crypto. It still shows you these markets are not like Uber efficient. Like I'm pretty sure if we woke up tomorrow morning at 9:00 a.m. or whatever and found out Nvidia revenue just took a 20% plateau up, I'm pretty sure that would react like that, the stock. >> Yeah. >> Here it didn't and there's just still some inefficiencies. Like, you know, people have to figure out what the hell that means. You know, you read it, you read it again. What does that really mean? How bullish are you? And, you know, the crypto markets and hype in particular, as far as this market efficiency goes in where it trades, I

think still has some room to go before it's at, you know, Nvidia level, which by the way is a good thing. Right? That shows there's like still plenty of time to get in here. You haven't missed it. >> Yeah. Just on that note, I'm curious and I was going to ask you at the top of the show, how many times do you check the hype price a day? >> A lot. >> [laughter] >> I mean, you know. >> Peter, that makes two of us. >> You know, look, it's a different world when you have a 24/7 asset, right? >> Yeah, yeah. >> You know, there's, you know, I I I I don't, you know, there are two or three-hour periods that go by in my life where I haven't checked it, but I usually say, "Wow, it's been two or three hours. I better check it."

And you know, like probably everyone we all know, I sleep with my phone next to my bed. >> Yeah, yeah. >> And I put it in airplane mode and it, you know, as soon as I wake up and turn it on, and the first thing I check is what the hype price is. >> Yeah, naturally. >> Uh so, you you you know, you look, you can't help that in a 24/7 market. But by the way, like this is a this is what's coming for everybody. Right? Like, we all know eventually all equity markets, all these markets going to go 24/7. Just a question of how and when, and in a lot of ways they already are, right? Like, there are lots of ways to trade Nvidia and Tesla after market. And and you could get prices sort of any time, and obviously HIP 3 and hyperliquid is a has

become a big part of that. But I check I check it a lot. >> Yeah, [laughter] yeah. Um and so, you know, you you you can trade things after hours, 24/7, also before they even exist, SpaceX. Uh last time we checked, I think it was around 170 175. >> it was like 168 last I checked. >> Um and so, I'm I think that puts it around maybe just under 2 trillion. >> and a half right now. >> Okay. >> With like a ton of open interest, too, like 165 million dollars open interest. >> Yeah. Yeah, it's moving in the right direction. I mean, when you say a ton, that is a spec compared to what we're going to have tomorrow.

>> 100%. >> But it's not it's not it's not a it's it's significant. It's not a a non-meaningful amount. >> Yes. Yes. >> And I look, I've been carrying on about this a lot on Twitter. >> I was going to ask you about this. Yeah. >> Look, I've been carrying on about this a lot. I mean, if you look at Cerebrus, right, which which already happened, right? Um Cerebrus was a little easier of a story because basically it came out on Hyperliquid. It popped up. It sort of crept up a bit over time. The IPO price 35% below where it was on Hyperliquid. And then the market price, you know, the equity price shot right to the hopper of the Hyperliquid price and it's it's borderline straight line.

>> Yeah. >> Which was It was amazing to see. >> Right. Yeah. >> You know, on SpaceX so far, you know, it comes out on Hyperliquid. It shoots up. >> Yeah. >> It's dribbled down quite It's actually sort of went down and it sort of plateaued for a while and then it's kind of shot down a lot over the last few days. I don't know why. I assume what's been going on is, you know, guys like me yelling at Elon saying, you know, "Dude, 135 is too low. Look at where it's trading on Hyperliquid." Clearly, they're not changing the price. It's happening tomorrow at 135. And presumably there's some disappointment in that.

>> Yeah. >> So, it's come down a lot. I assume Like, I can't tell you where SpaceX is going to be a month from now. Um I'm not even sure I can tell you where it's going to be like a week from now. I'm pretty sure it's going to open pretty close to where it's trading on Hyperliquid right now. Like, that I have a fair amount of confidence in. And I don't have an order to buy any at 135, but I kind of wish I did right now. But, I'd probably sell it at 167 tomorrow. And And look, it's easy to sit here and say that now. It's always It's always easy to say talk about stuff when you don't have a position, which I don't. But, there's a decent chance that the SpaceX on Hyperliquid over the next, whatever, you know, 18 hours is going to be really fun

to watch. >> Yeah. This was one of the things that the ICE chairman, New York Stock Exchange owner, Jeffrey uh Sprecher, uh he he talked about how relevant this was going to be when SpaceX launched. How he he said it was either going to be highly relevant or highly irrelevant because of how disjointed or or consistent it is with the price that it is on hyper liquid. Of course, this is in the midst of everything else, you know, positive things that he had to say about hyper liquid, bigger than NASDAQ, all of these things. It was incredible to see. Just curious about your reaction to those comments and then does is he on the right track here? Like this is going to be pretty important to make sure that we have some price consistency between hyper liquid and ultimately where this ends up.

>> Yeah, meaningful price discovery. I think that's really the term. By the way, it was great to hear him say this was bigger than NASDAQ. I would say of every sort of titan in the exchange who didn't say that. I understand why from his point of view it's a little bit of a competitive thing to say NASDAQ and I kind of love it. Um but you look, it's super important, right? Like you know, the whole point here is that we believe strongly, I believe strongly that hyper liquid is providing really interesting price discovery. And you know, Cerebrus was an I I tweeted about this this is a chart floating around that I put together was amazing. It was it was almost a flat line.

Uh it was it was near perfect on price discovery for that. We'll see how it is on on SpaceX tomorrow. SpaceX look, Cerebrus I think, you know, generally speaking was sort of a regular way IPO, right? IPOs happen all the time. This was somewhat of a regular way IPO. SpaceX is like nothing we've ever seen before. So like plenty of weird stuff is probably going to it's already happened and it probably will happen with this thing. So um I feel like as a hyper liquid guy, I have a one-way option here. Meaning if it predicts the price perfectly, I'll be running around saying it predicted the price perfectly. If it doesn't, I'm going to say SpaceX is so different. And you know, I will I will take my mulligan there cuz I think SpaceX really is different. The

next one that comes out, I will stick back to my guns that it needs to provide serious price discovery. I I think it will. My money's still my my my my my livelihood is still on it doing a good job there, but we'll see. It is It is a pretty wild one. >> Yeah. Yeah, I mean we we we just had these string of incredible fundamental and market catalysts for Hyperliquid this year. I mean HIP-3, that was huge on the fundamental side. Then you had this Coinbase news, huge on the fundamental side, also huge catalyst. Then Cerebus, then SpaceX, then Anthropic, then Open AI. Like they're all just be this continued attention on the market.

>> the most important one, by the way, which was a warrant round that started, you know, Friday late late on a Friday when the oil markets the traditional markets were going to be closed for the next 48 hours. >> Yeah. Yeah. >> I mean that was talk about like uh yeah. I think that's what got, you know, the CME's attention. I mean how could they not notice that? >> Right. Right. >> Sorry I interrupted you. >> on the on the IPO side though, how how important do you think getting Anthropic and Open AI are to Hyperliquid? After that and we're we're going to get a drawdown in terms of like the amount of IPOs coming out. Like the hype around AI is It's going to be like the maximum point of hype with those two IPOs. How important are those moments for Hyperliquid?

>> Well, look, um it is a foregone conclusion that when those two IPOs happen, they will come on, you know, Hyperliquid via tradexyz pre-IPO, just like these others have. I don't want to swear to it, but I'm pretty sure they're going to do that and that'll happen. So it's definitely going to happen. It's not like we hope it happens. It's going to happen. To me, the two questions are A, how much volume and open interest do we get? And do we see it picking up with each new IPO? Um and B, how good of a how good at it is a price discovery? And those two things relate to each other, right? Like for everyone that happens, the better they are at discovering the price on Hyperliquid, the more the next one more capital the next one should attract because people are saying this is real.

This is meaningful. So both those two things should have feed on each other, but I I expect these, you know, you're right. It's been a nice year for hyperliquid because a number of things keep happening that are super relevant to it. And SpaceX, Anthropic, OpenAI all fall into that bucket. I think it'd be great to see. And and I, you know, again, SpaceX is a different animal, but I I I will still predict that each one of these in succession will attract more volume and more open interest than the last one. >> Yeah. >> That's that's my expectation and we'll see if I'm right.

>> Yeah, interesting. One of the things that, you know, the the owner of the New York Stock Exchange said that I'm I'm looking to confirm this because it sounded almost bizarre when he said it, but he, if I recall correctly, he said that these markets could actually be bigger than the IPO markets themselves. And I'm just curious if there's credence to that claim, if it's a reason because the derivative can be bigger than the spot. What what I mean, to think about the scale of this, if you know, there is more volume and open interest here, it it it does indicate better price discovery. And if it actually is bigger than the other market, it becomes the canonical price and almost the leading indicator.

>> Yeah, well, I think that's exactly Look, I think it's already a leading indicator. What the thing Well, I think he was getting at was, you know, at some point it's going to become, you know, the investment bankers sitting in a room and picking where to price something is going to become less and less relevant. And as you say, like, if it the bigger it gets, bigger than the IPO sounds amazing to me. But like, the bigger it gets over time, the more important it's going to be. And like, you know, if you're a big institutional investor and you planned on investing in, you know, whatever, SpaceX or whatever, and you're worried that you're not, you know, you you put in an order for X number of shares and you're worried you're going to get cut back by a lot, you know, being able to do it on hyperliquid

beforehand is really good. And and, you know, I I personally believe that discount, the difference between where IPO is getting priced and where they're trading on hyperliquid, that will shrink a lot over time. I Over the years, even before I ever heard of hyperliquid, uh I have personally been a big proponent, if that's the right word, uh of, you know, of the sort of sell side, meaning the guys that are selling their companies in IPO versus the buy side. I've always thought that the idea of an IPO discount is ridiculous. Like it's literally just paying a toll to the buy side, and why do we have to do that? Um and I think this is a way to really solve that.

>> Yeah. >> And to to really change that. >> Yeah. And and make that market so much more efficient. Um you know, also, another catalyst that you know, we we didn't really talk about, but is is very related here, is that, you know, perps are coming to the US. There's regulation here. Uh there was the approval >> as well. >> ETFs as well. Um I mean, just on the regulatory side, uh you know, we saw Kalshi was able to get its Bitcoin perp out there. They also now announced that they're they have hyperliquid perps um on Kalshi as well. And so, I'm curious because I saw some mixed opinions out there.

I mean, bullish or bearish, I guess is the reductive way to frame it, but you know, I can kind of frame the argument two ways. On one hand, you know, hyperliquid is going to become available to US customers. Um that's going to unleash a lot of capital. On the other hand, we're going to see new entrants into this market, regulated players, you know, some of which we've been talking about, could enter and maybe siphon off some of that market share. Which one offsets the other? Where How do you think regulatory regulation is going to affect hyperliquid's market share? >> Yeah. That's a lot a lot of good questions there. Let me try to tackle them and tell me what what I missed.

First of all, I would say, most importantly, like I've been investing in financial services companies for 26-plus years. Um let me be the first to break it to everybody. Very few, if any, financial services companies in the world have true franchise value, right? There's very little you can do in the financial services world that someone else can't replicate. Right? Like American Express, that's a franchise value, right? Like that black card, people love it. It has cachet. It's hard to just replicate that. There's not a long list, right?

So, to think that you can be in any financial services business that nobody can ever replicate is crazy. And I don't think Hyperliquid isn't either. So, you know, the more success they have, the more capital is going to be chasing to try to to try to do what they're doing. And I take that as a compliment. So, that's sort of fact number one. Uh fact two is look, they've had competition so far. Needless to say, they have plenty of competition for the Binances of the world, you know, on the centralized exchange side. They had, you know, a year ago or whatever, nine months ago, all people could talk about vis-à-vis Hyperliquid was Aster and Lighter and saying here comes some real competitors, CZ is behind Aster, like here come the big boys. And I think while they're certainly still around,

they're not they're they're meaningful, I think people sitting here today feel pretty confident that Hyperliquid did a pretty good job fighting off that competitor. Um and look, I think perps coming to the US, which itself could be, you know, a two-hour podcast, um I think that's what while Hyperliquid is not day one doing that, right? If their Cal she is, Hyperliquid's not, that's clear, it's a huge step in the right direction for Hyperliquid. There was a reason like the day that came there was announced, Hyperliquid move moved up because it is a big step in the right direction. And I think that um one way or the other, and it's not exactly clear to me which way it'll be, but one way or the other, I think Hyperliquid will figure out how to be how to get to the US. And, you know,

on one hand, I think it's probably not a big secret that there are probably retail traders in the US right now using VPNs to be on Hyperliquid, but that's fine, but that's not the big kahuna, right? The big kahuna is, you know, institutional investors, um whether it's trading crypto or trading Nvidia or trading oil, you know, having them, you know, online and hyper liquid. I I and I think to date that's been probably either zero or near zero is our our impressions. >> Yeah. >> And this is a big step. PERPS PERPS are a big step to getting there.

>> And the ETFs are kind of, you know, we won't talk on too much, but it's similar where it's like it opens up another pathway for people to buy into these assets. But from what I understand, there's different like regulatory pathways that certain types of firms can get exposure to certain assets. Like there's some firms out there that can't buy the ETFs, but they can buy Hyper strategies. And I'm I'm not sure if it goes vice versa, but I'm just curious. PERPS have been the way to express bullishness on Hyper liquid in the public markets. Prior to ETFs, there was no other way. That allegedly led to premium to kind of like the singular golden child kind of uh you know, format of investing. And then now we

have the ETFs. Do you think the ETFs are siphoning flows off of PERPS? >> So, I I I have two answers for this from two sides of my brain. On one side of my brain, I can't help but be competitive. I'm a competitive guy. We're all competitive guys. Like I can't help myself. Um and you know, everyone who wakes up tomorrow morning and says I want to get some Hyper exposure, I want them buying a share of PERPS stock, not a share of the ETF. Um that being said, um in the end, right? Five years from now when we're all talking about this, like this will be a success for all of us, me, you guys, any investor, um not at whether the MNAV a year and a half or five years from now is 1.2 versus 1.1, it's whether Hyper has gone up a lot.

>> Yeah. >> And the ETFs, you know, being out there, talking about it, getting more more people, you know, engaged, and more ways to do it. Like as you said, there are some people that probably prefer PERPS over an ETF. There are some people prefer ETFs over PERPS. It might be a an investment choice. It might be some legal or regulatory difference they have. Like, whatever it is, markets like choices, and generally speaking, the right side of my brain or whatever is perfectly happy perfectly happy to have to have more avenues for people to get hyper exposure. So, the net of that I think is positive. I'm happy the the the ETFs are out there. I think someone I saw some analysis someone did on the thing we announced this morning, which,

you know, it's a week delayed, so it was really what we did in the week ending, you know, last Thursday. I think we issued more stock than all the ETFs combined took in. So, like, we're still doing well against them, but I don't, you know, if they taking a lot and hype goes up a lot, like, I'm not going to be that upset about that. >> Yeah, we're good. >> Yeah. >> And um do you So, you know, we were invested in this relative strength trade, right? And so, you know, I'm curious how cuz things have shifted a little bit in recent days, right? And so, we're still generally, you know, part of this um Bitcoin doesn't maybe, you know, it's not cooperating, let's say. And then, you know, these IPOs are sort of a double-edged sword. They're bringing a

ton of interest to and open interest and volume to hyper liquid. It has this entirely new, you know, revenue stream and product line as a result of it. Um but at the same time, people are a little bit skeptical of how this these IPOs could affect the market. Um and and we're, you know, kind of get see the first of three, and then we're going to have a couple more. Do you think hyper How do you think hyper liquid reacts in kind of the best in maybe the best case scenario, worst case scenario, given the macro, headwinds, tailwinds? Just curious, you know, where what your view is of macro and the AI trade nowadays? And you know, obviously hyper liquid is a part of that.

>> Yeah, I would say a few things. One, I've heard the theory that, you know, Bitcoin's come down so much because a lot of that air is going into SpaceX, whatever else. And I don't doubt that. Like I'm not sure that's true, but I wouldn't argue against that either. It sounds plausible to me. Um I think I don't think Hyperliquid goes into that category. Um I mean, look, in general, there's no doubt there's some correlation with Bitcoin and the other large cryptos. On the other hand, like if you look at 2026 so far, there's not a whole lot of correlation. Like it's not doesn't look correlated at all. Um but the point is let's let let's let's let's assume that theory is true for a second that people are selling that Bitcoin to buy SpaceX, which I'm not sure I'd recommend, but let's say they're doing that. Like

Bitcoin is trillions of dollars of market cap or whatever, more than a trillion market cap, I think. SpaceX is more than a trillion market cap. These are huge things. Hyperliquid is a speck compared to that. Um and I think Hyperliquid has and will continue to trade more of a fundamental sort of like a regular company. It'll trade on what people think, you know, growth's going to be of revenue, growth of buybacks, the way sort of a regular company might trade, and less about, you know, is Bitcoin up or down or whatever. So, I think the combination of both fundamental analysis, which you can do on Hyperliquid, you can't do it on on on Bitcoin, and no offense, you can't do that on SpaceX either.

Um and the fact that like, you know, the the it's so small relative to Bitcoin and relative to ETH right now. Like if that air has come out of the tire, this is like barely a breath relative to that. >> Yeah. So, so, you know, Bit- Bitcoin finding lows in the 50s, 40s range that that that that people seem to think is certain. We'll see what happens. You don't You think You think Hyperliquid has this has this ability kind of just trade in a divergent way. >> I definitely do, but I'm not going to sit here and say there's no correlation. Of course there's correlation. Right? Like if crypto goes away entirely, like that ain't good for Hyperliquid, right?

Like let's let's be really clear. Um and you know, so So of what Hyperliquid has been able to build, so much of what got hyperliquid to where it is, both literally and figuratively, right? Are the crypto rails that are below it, that Bitcoin sort of led the way on and Ethan so led all led the way on it. So like there's no doubt like you know, directionally, crypt strong crypto is very good for hyperliquid and weak crypto is not. I just think that the correlation we have seen in hyperliquid sort of up until if you look at a a chart of hyperliquid sort of pre-mid-January and post-mid-January of this year, it is like totally different from a correlation point of view. Um but but don't get me wrong. Like Bitcoin going to 40, you know, in of itself cannot be good

for hyperliquid. >> Well, David, man, I think we have a little gift for you, man. >> I love gifts. It's what I'm here for. >> uh this is something from our team here. There's a couple things here. >> Oh, wow. >> is a hyperliquid strategies engraved wine box with a nice bottle in there for you. >> That is great. Thank you very much. >> And a flask with your name on it at the same time with your name on it. >> Oh, that's good. There it is. A flask with my name on it. I own a couple flasks. I have to admit I haven't used them in a while. Uh but I definitely should with this one. That is awesome. Thank you, guys.

>> And there's a nice there's a nice bottle of wine in here and this just opens up. >> Oh, that is totally awesome. Wow. >> This is actually goes down in there. Engraved by >> A ton. >> A ton. >> Wow. That's very impressive. [applause] Very impressive. This is that's too nice to drink. >> This is a thank you for uh you know, fighting the good fight out there uh amongst the >> Boys have done all right from the last couple months on hype. >> I'll say two points. One, I absolutely appreciate it uh entirely. Two, I will remind everybody the first rule of Wall Street is there's no such thing as a free lunch.

>> [laughter] >> Ladies and gentlemen, that is David Shamus from the tokenization tower.