Hyperliquid's HYPE token fell approximately 8% to around $58 on Wednesday after several crypto funds initiated large unstaking events, creating a withdrawal queue totaling nearly $150 million. Hyperliquid is a decentralized perpetual futures exchange operating on its own app-chain Layer 1, and HYPE serves as the network's native token, used for staking, governance, and as collateral for builder-deployed markets.

According to data from hedge fund analytics platform Block Liquidity, Multicoin Capital holds a combined $138.78 million in staked HYPE, with roughly 83% — about $116 million — currently sitting in pending withdrawal. Selini Capital and Galaxy Digital have also queued HYPE tokens worth $4.4 million and $29.4 million, respectively, for withdrawal. Additionally, a wallet linked to Multicoin deposited approximately 167,000 HYPE, valued at $11.2 million, to Coinbase, which may indicate an intent to sell.

The price has since partially recovered, last trading at $59.19, according to CoinGecko data. Trading volume over the preceding 24 hours exceeded $415.4 million.

Withdrawal Queue Dwarfs Daily Spot Turnover

The pending bulk unlocks are expected to be processed within five to seven days, creating a nearly $150 million overhang in HYPE's liquid supply. While perpetual contracts for HYPE trade around $400 million in daily volume, the spot market is considerably smaller. Block Liquidity's flow tracker recorded just $72.8 million in HYPE spot volume over approximately 28 hours leading into Wednesday morning, with 1,463 unique buyers versus 982 sellers. Wintermute was the largest net buyer at over $9 million, while the top net seller offloaded $5.2 million.

A withdrawal queue nearly double the daily spot turnover has contributed to recent market apprehension. HYPE has declined approximately 11% over the past week, dropping as low as $57.39. However, whether the unlocked tokens will actually be sold into the market remains unclear.

Selini Capital's unstaking appears tied to the shutdown of the HIP-3 CASH perpetuals markets operated by DreamCash (X post). Like many recent HIP-3 deployments, DreamCash's USDT-based markets struggled to attract liquidity, particularly as USDC became more deeply entrenched in the Hyperliquid ecosystem.

Launching a builder-deployed perpetuals market under HIP-3 requires staking 500,000 HYPE as a slashable security bond, which can be refunded when the market is decommissioned. Selini Capital may choose to sell its returned HYPE allocation through an OTC desk. On-chain data shows a wallet associated with Selini Capital invoking the StakingTransfer method (HypurrScan).

Sale or HIP-3 Reallocation?

While Selini's HYPE unlock stems from shutting down a HIP-3 market, Multicoin's tokens may at least partially be destined for a new deployment. Last week, the firm made its first venture investment in the Hyperliquid ecosystem by leading a $1.75 million seed round into Trasia, an Asia-focused, noncustodial trading platform that plans to launch perpetuals for Asian equities (HyperEVM Scan).

Multicoin Capital managing partner Tushar Jain stated on X that Trasia is targeting "net new users" unfamiliar with Hyperliquid. He later claimed in an X post on Wednesday night that the unstaked HYPE was not intended for sale (OnchainLens Telegram).

Market participants will be watching where the funds flow following the July 28 unlock. While absorption through new HIP-3 deployments or routine asset reallocation remains the base-case scenario, HYPE has yet to recover to its recent highs.