The 1 billion buyback fails to stop the decline of HYPE, are core members quietly selling coins with Multicoin?

Written by: Ma He, Foresight News

By the end of July 2026, on-chain analysis by analyst MLM (@mlmabc) showed that since the actual distribution of team tokens began in December 2025, approximately 4.93 million HYPE entered team members' wallets, worth about $270 million at the time, accounting for 0.493% of the total supply. Among them, 1.19 million were sold on the open market for about $32.5 million, and 3.14 million were transferred to over-the-counter trading platforms, valued at about $132 million at the time of transfer, totaling approximately 4.33 million corresponding to $165 million. During the same period, the Assistance Fund repurchased approximately 9.8 million tokens, spending about $364 million, at a rate more than twice that of the team's sales.

The price of HYPE has fallen from a high of $70 in late July to a current price of $52.4, with a market capitalization of $13.23 billion.

So, what factors caused the significant correction of HYPE? Is the core team's token sales really the most important factor?

Details of Team's Actual Token Sales: Limited Distribution, Controlled Sales

According to the project's tokenomics, the total supply of HYPE is capped at 1 billion tokens, with no additional inflation design. The main distribution is roughly as follows: Genesis distribution accounts for about 31% (fully released at TGE, mainly for early user airdrops); future emissions and community rewards account for about 38.9%, foundation budget about 6%, and small portions for community grants. The core contributors of Hyperliquid account for 23.8% of the total supply, or 238 million tokens.

Hyperliquid is officially designed for cliff unlocking one year after TGE (November 29, 2024), followed by linear release, with most planned to be completed between 2027 and 2028. Theoretically, the amount that can be released monthly was once exaggerated by some tracking platforms to nearly 10 million tokens, but the actual distribution is far below this.

MLM's tracking, combined with tools like Qwantify, shows that from December 2025 to the end of July 2026, the total amount actually distributed to team members' related wallets was about 4.93 million tokens. The early months saw higher distributions (about 1.75 million in December, about 1.2 million in January), which then significantly converged (140,000 in February, 173,000 in March, 333,000 in April, 533,000 in May, 452,000 in June, and about 433,000 in July).

The cumulative actual release is far below the "theoretical values" on some unlocking calendars because the team did not claim the full amount and there were behaviors of re-staking and holding.

The 1.19 million tokens sold by core members on the open market, valued at about $32.5 million, were mostly small TWAP trades. The larger portion was transferred to known OTC merchants. Generally speaking, OTC transfers are usually counted as potential selling pressure in on-chain analysis, but the actual transaction price, timing, and whether all of it was executed remain uncertain.

Cumulative Repurchases Exceeding $1.02 Billion

99% of Hyperliquid's trading fees flow into the Assistance Fund, used to continuously buy HYPE on the open market. This mechanism directly converts protocol revenue into sustained buying pressure for the token. According to the latest data from asxn, the protocol has cumulatively repurchased over $1 billion, with the fund's holdings exceeding 45 million tokens in mid-2026.

Since the team began actual distribution in December 2025, the Assistance Fund has repurchased about 9.8 million tokens, spending about $364 million, averaging about 1.23 million tokens and about $46 million per month. This pace is more than twice that of the team's (including former members) sales.

In June 2026, Hyperliquid's protocol revenue remained high, but after a drop in trading volume and revenue in July, the repurchase pace also slowed (but still maintained buying pressure).

In other words, the team's limited sales were absorbed by the protocol's own revenue repurchases. However, when market sentiment is lukewarm and trading volume shrinks, the funds supporting Hyperliquid's repurchases will also decrease, putting pressure on the token's buying pressure.

Whales Selling Tokens, HYPE Spot ETF Net Outflow

After HYPE reached a historical high of about $76 in mid-June 2026, it fell by about 30%. It is inaccurate to simply attribute this adjustment to "team unlocking and dumping." Some venture capital funds have unstaked and sold tokens, and the continuous daily net outflow of HYPE spot ETFs is also an important factor affecting the token's price decline.

In July 2026, wallets related to funds such as Multicoin Capital and a16z, which had previously bought HYPE on the secondary market, showed large-scale unstaking, followed by records of funds flowing to exchanges.

On July 22, monitoring by Yu Jin showed that a suspected address related to Multicoin Capital (starting with 0xaB3) sold 607,000 HYPE, valued at $37 million. These HYPE were bought through Galaxy Digital OTC five months ago at a price of $30, with 210,000 HYPE staked and 395,000 HYPE remaining in the wallet.

Multicoin co-founder Tushar Jain explicitly stated that the unstaking was not for selling, but because the wallet was highly tracked, requiring regular address rotation to protect privacy.

On July 29, Multicoin Capital transferred 395,000 HYPE ($37 million) to Coinbase and continued to redeem more HYPE from staking. Additionally, 1.97 million HYPE ($108 million) successfully exited staking after a 7-day unstaking period. Successfully redeemed HYPE included 86,000 ($4.78 million) that were previously transferred to Coinbase Prime.

a16z also engaged in high selling and low buying, reducing its holdings of HYPE by $10.19 million on July 1, and again selling 421,800 tokens worth about $25.3 million on July 18. By July 30, a16z-related addresses began buying HYPE tokens again, cumulatively withdrawing 132,056 HYPE from various exchanges, valued at about $7.335 million, with an average withdrawal price of $55.54.

The flow of funds in the HYPE spot ETF is also not optimistic.

Since early July this year, the HYPE spot ETF has seen continuous net outflows, averaging about $1 million per day for several weeks, contrasting sharply with the large net inflows in May and June this year. On June 25, there was a single-day net inflow of $108.09 million into the HYPE spot ETF, setting a historical high for net inflows.

As of now, the total net inflow of its spot ETF has reached $277.98 million.