Hyperliquid’s token is tanking as ETF investors flee, so why does Grayscale think it is massively undervalued?

Investors are withdrawing money from Hyperliquid-linked exchange-traded funds for the first time since the products launched.Data from SoSoValue shows that the three funds have recorded more than $13 million in net outflows in July, putting them on course for their first negative month after attracting about $280 million since inception.Nearly $27 million has left the products since demand reversed in the second half of July, ending a nine-week run of consecutive inflows, SoSoValue data show.Hyperliquid ETFs Weekly Flow (Source: SoSoValue)Data from CryptoSlate shows that the fund retreat has coincided with a more than 13% monthly decline in Hyperliquid’s HYPE token, which traded near $54 this week. This is roughly 30% below its mid-June record high of $76.HYPE is now heading for only its second losing month this year, even as Grayscale Research argues that its price undervalues the revenue generated by the underlying network.Grayscale sees a valuation gap despite weakening demandThe reversal in ETF flows is widening the divide between market sentiment and Grayscale’s assessment of the economics supporting HYPE.Hyperliquid has crossed $1 billion in cumulative protocol revenue, less ...