Donald Trump’s Endorsement Propels Hyperliquid and US Crypto Regulation Dialogue

Former U.S. President Donald Trump has announced that Michael Selig, Chairman of the U.S. Commodity Futures Trading Commission (CFTC), is actively assisting the perpetual contracts trading platform Hyperliquid in its bid to enter the U.S. market in a “fully compliant, legal” manner. Following this significant revelation, Hyperliquid’s native token, HYPE, experienced a sharp surge, climbing over 22% in a single day.

Speaking at a Wednesday press conference alongside technology leaders and several federal agency heads, Trump confirmed the CFTC’s initiative to introduce perpetual contracts platforms to the American market. He specifically stated:

“To my knowledge, Mike (Selig) is also working to bring Hyperliquid into the U.S. in a fully compliant, legal manner.”

Understanding Perpetual Contracts and Their Market Impact

Perpetual contracts, often referred to as “Perps,” are a form of futures contract without an expiration date. They enable investors to speculate on the price movements of assets without the need for actual asset ownership. These instruments have rapidly become a cornerstone of the cryptocurrency derivatives market. The CFTC has already laid groundwork for their broader adoption by approving related product applications from KalshiEX and Coinbase, paving the way for Bitcoin perpetual contracts to be listed in the U.S.

Analysts at JPMorgan note a growing trend among traditional investors seeking 24/7 market exposure to assets like oil during off-hours. This shift is significantly boosting the prominence of “on-chain perpetual contract platforms” like Hyperliquid.

However, the rapid ascent of these platforms is not without scrutiny from traditional financial giants. According to a report by Bloomberg, institutions like the Chicago Mercantile Exchange (CME) and Intercontinental Exchange (ICE) have expressed concerns that such platforms could be exploited for market manipulation or price distortion. They advocate strongly for their inclusion within the CFTC’s established regulatory framework.

CFTC Chairman Michael Selig himself addressed the potential for Hyperliquid’s entry into the U.S. during a June interview with Bankless. He articulated that on-chain technologies like Hyperliquid are poised to “revolutionize our markets.” Selig emphasized, “We hope to pave a path to bring these on-chain markets to the U.S. while ensuring they meet certain regulatory standards.”

Market Reacts to Trump’s Endorsement

The public endorsement from Donald Trump immediately ignited market enthusiasm. According to CoinGecko data, Hyperliquid’s native token, HYPE, surged by an impressive 22.9% within 24 hours, reaching $71.47. Furthermore, several Hyperliquid-related exchange-traded funds (ETFs) saw significant gains on Wednesday:

• 21Shares’ “Hyperliquid ETF (THYP)”
• Bitwise’s “Hyperliquid ETF (BHYP)”
• Grayscale’s “Hyperliquid Staking ETF (HYPG)”

All three of these ETFs experienced nearly 20% rallies during the trading session. Additionally, “Hyperliquid Strategies (PURR),” listed on Nasdaq, recorded a stunning single-day increase of 30.4%.

Broader Crypto Policy Discussions: Bitcoin Reserves and the CLARITY Act

During the same press conference, Trump was questioned about the U.S. government’s potential interest in pursuing a “Bitcoin strategic reserve.” He indicated that the next steps on this matter would fall under the purview of the U.S. Securities and Exchange Commission (SEC).

Trump remarked that such matters are “certainly always discussed” and suggested that Bitcoin has “eased a lot of pressure on the dollar.”

Trump Urges Congress to Pass the CLARITY Act

In a related development, Trump also urged Congress on Wednesday to pass the “Digital Asset Market Clarity Act (CLARITY Act).” This pivotal legislation aims to establish a comprehensive federal regulatory framework for cryptocurrencies. If enacted, it would mark the first time the U.S. has comprehensively regulated the cryptocurrency industry at a federal level.

Trump described the CLARITY Act as a “very powerful, well-structured bill” that would help the U.S. maintain its leadership in the digital asset space, enabling it to “surpass China and all other countries.”

However, the CLARITY Act has faced previous setbacks, and with time rapidly running out, its passage through Congress before the end of the year remains a significant challenge.