Hyperliquid Under Scrutiny Amid Whale Manipulation Allegations

By: Eva Baxter

Crypto trading platform Hyperliquid is facing allegations of market manipulation after its HYPE token hit an all-time high, raising questions about the integrity of decentralized exchanges. The claims surfaced following a dramatic 200% surge in the price of the Plasma (XPL) token, purportedly orchestrated by a cluster of large asset holders, or 'whales'. Analytics firm SpotOnChain revealed that these whales drove XPL's price from $0.60 to $1.80 before it sharply retraced, allowing the orchestrators to reap significant profits.

More than $47 million was reportedly gained by four major players, with one whale alone netting over $15 million. On the flip side, those on the losing end suffered losses totaling more than $6.5 million. The incident has spotlighted the vulnerability of decentralized exchanges to manipulation, leading to discussions about the reliability and transparency of these platforms compared to their centralized counterparts.

Despite this controversy, Hyperliquid's HYPE token celebrated a remarkable milestone, surging to $51.05—its highest level yet—amid the turmoil. This represented a significant 10% increase within 24 hours, even as the token's price corrected to around $48.8 later. Overall, Hyperliquid has shown a persistent growth trajectory, as demonstrated by its monthly trading volumes reportedly surpassing those of traditional trading platforms. In July alone, the platform processed over $330 billion in spot and perpetual trading volumes.

The impressive figures reflect growing market confidence in decentralized platforms. Industry experts suggest that with this momentum, Hyperliquid could continue to capture market share from centralized exchanges. Such developments underscore the significant shifts occurring within crypto markets, particularly with well-performing tokens related to blockchain technologies like Bitcoin and Ethereum.