Hyperliquid (HYPE) Price: Will 37 Million Token Burn Reverse the Downtrend?

Token burns are the crypto world's favorite parlor trick—cut supply, hope for magic. Hyperliquid just tossed 37 million HYPE tokens into the digital furnace. The question now isn't about the flames, but whether anyone's left to feel the heat.

The Mechanics of Scarcity

On paper, it's simple economics. Reduce the circulating supply, and each remaining token should, theoretically, be worth more. That's the playbook—one followed by projects looking to signal confidence and engineer upward momentum. It's a bold move, especially when the charts are painting a different picture.

A Gamble Against Gravity

Markets have a nasty habit of ignoring textbook logic. A burn can be a powerful catalyst, but it's not a magic wand. It doesn't erase selling pressure, fix flawed tokenomics, or suddenly attract a wave of new capital. It's a single lever in a vast, unpredictable machine. For every successful 'supply shock' narrative, there's a token that burned brightly and then fizzled out.

The Verdict from the Charts

So, will it work? The 37 million token incineration is a definitive bullish signal from the Hyperliquid team—a costly commitment to deflation. It creates a tangible supply deficit. But reversing a trend requires more than a one-time event; it needs sustained buying pressure, renewed developer activity, and a market willing to reward the gesture. Otherwise, it's just rearranging deck chairs—a spectacle for the faithful while the broader market yawns and checks another chart.

TLDR

• Hyper Foundation proposed burning all 37 million HYPE tokens in the Assistance Fund, representing 13% of circulating supply
• Validators must vote by December 21, with final stake-weighted results announced December 24
• The Assistance Fund address has no private key and tokens are permanently inaccessible without a hard fork
• HYPE price increased 2% to $26.66 following the announcement, with futures open interest jumping 3% to $1.52 billion
• Bitwise recently filed for the first spot Hyperliquid ETF in the United States with a 0.67% management fee

The Hyper Foundation announced a proposal on December 17 to burn all HYPE tokens held in the Assistance Fund address. The proposal requires approval through validator voting.

The Assistance Fund currently holds 37 million HYPE tokens. These tokens represent about 13% of the circulating supply and 3.71% of the total supply.

Hyperliquid Foundation just proposed to burn all the $HYPE in the assistance fund.

Would reduce FDV by $1B at current prices and circulating supply by 13%. pic.twitter.com/P8cVxSrhJA

— Ryan Watkins (@RyanWatkins_) December 17, 2025

The fund operates by automatically converting trading fees collected by the exchange into HYPE tokens. These tokens are stored at a system address that has never had a private key or any FORM of control.

The tokens in this address cannot be accessed or moved without executing a hard fork of the network. The burn proposal WOULD permanently remove these tokens from the total supply count.

Validators are scheduled to submit their votes in the governance forum by December 21 at 04:00 UTC. Users can stake their tokens with validators who share their view on the proposal until December 24 at 04:00 UTC.

Voting Process and Timeline

The final decision will be determined through stake-weighted consensus. The results will be measured and announced at the close of voting on December 24 at 04:00 UTC.

A “Yes” vote means validators agree to treat the tokens as permanently removed from circulation. The proposal also includes a commitment that no future protocol upgrade would ever attempt to access the locked tokens.

Some validators have already publicly expressed support for the burn. Kinetiq x Hyperion announced they voted in favor of removing all tokens in the Assistance Fund address.

Market Response to Burn Proposal

HYPE price ROSE 2% following the announcement. The token traded at $26.66 with a 24-hour range between $26.21 and $26.66. Trading volume decreased 5% over the same period.

$HYPE (per request)

Dropping into an important support level.. If it has any hope of dead cat bouncing it needs to be here. Below this and it likely just fades into oblivion pic.twitter.com/vkwYE2Uz1U

— Nebraskangooner (@Nebraskangooner) December 16, 2025

Data from CoinGlass showed increased activity in the derivatives market. Total HYPE futures open interest climbed 3% to $1.52 billion in 24 hours. The 4-hour futures open interest increased almost 4%.

Both CME and Binance recorded open interest increases exceeding 5%. The funding rate rose to 0.0839%, indicating higher buying pressure in the derivatives market.

Technical indicators on the daily chart show the token holding above the $26 support level. The Relative Strength Index sits at 33, below the midpoint since early November. The token has declined for three consecutive days before stabilizing.

If HYPE maintains support above $26, potential resistance levels include $30 and the 50-day exponential moving average at $34. A break below $26 could push the price toward the October 10 low NEAR $20.

Bitwise recently amended its S-1 filing for a spot Hyperliquid ETF. The filing revealed a management fee of 0.67% and ticker symbol BHYP for the proposed fund.