Hyperliquid (HYPE) Could See Prices Reach $190 In Optimistic Market Capture Scenario

Decentralized exchange (DEX) Hyperliquid (HYPE) is experiencing a notable surge in its key metrics, positioning itself as a preferred trading platform amid rising tensions in Iran. 

This increased activity has propelled HYPE to outperform the market’s leading cryptocurrencies, boasting a major 23% gain over the past week. However, market analyst Ali Martinez has indicated that HYPE investors may soon encounter a new buying opportunity. 

The analyst highlighted that on March 8, the TD Sequential had signaled a buying opportunity for HYPE, which was subsequently confirmed as the token experienced a price increase of 28.23%, rising from approximately $30 to a high near $38.53.

However, as of March 13, the same indicator is now flashing a sell signal, prompting Martinez to caution that increasing selling pressure could lead to a short-term retracement to around $34. 

Currently trading at $36.37, this would represent a decline of approximately 6.5%, in addition to a recent 2.5% pullback observed over the last 24 hours, according to CoinGecko data. 

For Martinez, this potential pullback may serve as a strategic buying opportunity before the expected upward momentum resumes.

Adding to the altcoin’s bullish outlook, research firm DCo released a new valuation framework for HYPE. They modeled four scenarios based on the potential market capture of the $1.74 trillion daily Total Addressable Market (TAM) that Hyperliquid could attain through its HIP-3 protocol. 

Utilizing a three-year discounted cash flow (DCF) framework, each scenario assumes a gradual capture rate: 20% in Year 1 (2026), 50% in Year 2 (2027), and 100% by Year 3 (2028), reflecting the gradual process of building market share.

In a bear case scenario, where Hyperliquid captures just 0.01% of the market, HIP-3 could generate $32 million in annual fees at full ramp-up based on the conversion-adjusted TAM. 

When combined with baseline revenue projected at $1.35 billion and considering the terminal value from Year 3 total revenue, the DCF results in an estimated enterprise value of approximately $18 billion, which could result in HYPE reaching a new record of $60 per token. 

Under the base case of 0.10% market capture, Year 3 revenue from HIP-3 would climb to roughly $322 million, resulting in a total revenue of about $1.7 billion and an enterprise value nearing $22 billion. This would imply a token price around $72.

In the bullish scenario, with a 0.50% capture, the Year 3 HIP-3 fees would reach $1.6 billion, contributing to a total revenue of $3.0 billion. This would yield an enterprise value of $38 billion, corresponding to an implied price of about $124, representing a fully diluted valuation of around $124 billion. 

The most optimistic case, positioned at a 1.00% capture, projects total Year 3 revenue of $4.6 billion, with an enterprise value of $59 billion and HYPE potentially valued at $190.

DCo’s analysis reveals that, even at a default 20% discount and 20x multiple, the current price of $37 is considerably lower than the bear case valuation of $60. 

This suggests that the market has not fully appreciated the potential contributions from HIP-3 and is undervaluing the inherent value of Hyperliquid’s crypto exchange business.

Featured image from OpenArt, chart from TradingView.com