Update Sept. 22, 1:31 p.m. UTC: This article has been revised to feature comments from Nicolai Sondergaard, research analyst at crypto intelligence platform Nansen.
Major cryptocurrency investors, known as whales, are divesting from Hyperliquid’s native token amid rising concerns about an upcoming vesting schedule expected to release approximately $11 billion worth of tokens.
The whale wallet “0x316f” withdrew $122 million of Hyperliquid (HYPE) tokens on Monday, which were originally purchased at around $12 per token.
This whale has realized about $90 million in profit after nine months and is likely “selling to secure profits,” according to data from blockchain platform Lookonchain.
This selling activity coincided with the HYPE token peaking at a new all-time high of $59.29 on Thursday, yet it will face its initial major challenge in November when team tokens start to vest.
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According to the Hyper Foundation, 23.8% of the total supply allocated to core contributors will start unlocking on Nov. 29, marking one year since the project’s inception.
The vesting schedule will release approximately $11.9 billion HYPE tokens over a span of 24 months for the team, representing a potential “first significant test” for the token’s resilience, according to BitMEX co-founder Arthur Hayes’ family office fund, Maelstrom, stated on Monday.
In what it has termed a “Sword of Damocles” moment, it will introduce monthly unlocks valued at around $500 million, with only about 17% anticipated to be absorbed through buybacks, which leaves approximately $410 million in potential supply overhang, as per Maelstrom researcher Lukas Ruppert.
“Token unlocks generally can induce some selling pressure,” which isn’t always connected to a token’s “fundamentals,” according to Nicolai Sondergaard, research analyst at crypto intelligence platform Nansen.
Sondergaard noted that not all recipients will decide to sell, as some may retain their tokens to express confidence in the project.
“While a degree of selling pressure is likely during unlock events, the actual results will depend on how both the team and token holders react.”
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Hayes liquidates HYPE holdings for a Ferrari before vesting schedule
Maelstrom’s analysis was released shortly after Hayes sold all his HYPE tokens, reportedly using the funds to pay a deposit for a new Ferrari, according to Cointelegraph on Monday.
“I need to cover my deposit for the new Rari 849 Testarossa,” Hayes mentioned on Sunday.
Other whales seem to be moving toward Hyperliquid’s emerging rival, Aster, a decentralized perpetual exchange associated with Binance co-founder Changpeng Zhao.
On Monday, whale address “0x220” acquired $10.5 million in Aster tokens across two wallets and is now holding over $6 million in unrealized gains, Lookonchain reported in a Monday X post.
In the past week, the Aster token surged over 1,700% to become the fourth-largest DEX token in the industry, boasting a market capitalization of $2.5 billion.
In the same timeframe, the HYPE token declined by 7.9%, trading at $49.34 at the time of this writing, as per data from CoinMarketCap.
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