HyperLiquid cash flow valuation revealed: HYPE could soar to $385 in five years, with a potential pump of 600%

HyperLiquid (HYPE) has developed into a mature crypto-native exchange, with its unique "Assistance Fund" (AF) mechanism making HYPE one of the few crypto tokens that can be valued based on actual cash flow. By systematically allocating 93% of transaction fees directly to token holders, HyperLiquid creates predictable and quantifiable cash flow, providing an ideal foundation for deep cash flow discount (DCF) analysis. Recent studies suggest that, based on conservative growth forecasts, HYPE could reach $385 in five years, representing an underestimation of up to 600% compared to the current price.

Why is HyperLiquid suitable for cash flow valuation? Limitations of traditional multiple methods

Although most analysts in the market use traditional multiples to compare HyperLiquid with mature financial platforms, this method has obvious limitations:

· The fundamental difference between enterprises and token structures: mature financial platforms are corporate stocks, where capital allocation is guided by the board of directors, and profits are retained and reinvested autonomously by management; whereas HyperLiquid systematically returns 93% of transaction fees directly to token holders through the aid fund.

· Direct cash flow characteristics: HyperLiquid's design generates predictable cash flow, making it very suitable for DCF models rather than static multiple methods.

· Growth and Risk Characteristics: DCF can clearly model different growth scenarios and risk adjustments, while the multiple method may not fully reflect growth and risk dynamics.

Scientifically Determined Discount Rate: Balancing Risk and Return

To determine the appropriate discount rate, the study starts from reference data from the public market and adjusts for the specific risks of cryptocurrency:

Beta Analysis Result:

· HyperLiquid: Beta value is 1.38, implied equity cost is 10.5%

Although the Beta value of HYPE is relatively low, considering the unique risks of the encryption market, the study adjusted its discount rate from 10.5% to 13%, and this conservative setting takes into account:

· Lower governance risk: The direct programming allocation of 93% of transaction fees reduces concerns related to corporate governance.

· Higher market risk: HYPE faces regulatory and technological uncertainties as a native asset of encryption.

· Liquidity considerations: The token market usually has lower liquidity than the mature stock market.

Amazing Growth Forecast: Bull Market Scenario Analysis for Two and Five Years

Using a discount rate of 13%, the study reverse-engineers the implied return expectations of the market at the current price of approximately $54 for HYPE Token:

· Year 2025: Total revenue is 700 million USD

· Year 2026: Total revenue is 1.4 billion dollars

· Terminal Growth: Continuous growth of 3% every year thereafter

However, the encryption analyst @Keisan_Crypto proposed a more optimistic growth scenario:

Two-Year Bull Market Forecast:

· Annualized transaction fee: 3.6 billion USD

· Assistance Fund Revenue: $3.35 billion (93% of fees)

· Result: The intrinsic value of HYPE is $128 (undervalued by 140% compared to the current price)

Five Year Bullish Scenario:

(Source: CoinMarketCap)

· Annualized transaction fee: 10 billion USD

· Aid Fund Revenue: 9.3 billion USD

· Result: The intrinsic value of HYPE is $385 (underestimated by 600% compared to the current price)

This five-year forecast is based on HyperLiquid's global market share growing from the current 5% to 50% by 2030. Even if the 50% market share is not reached, these figures could still be realized through smaller market shares as global trading volumes continue to grow.

USDH: The Overlooked Additional Value Driver

Research also points out that the USDH stablecoin could bring additional value to HYPE. Under the Native Market model, USDH will use 50% of the stablecoin revenue for buybacks similar to an aid fund.

Looking ahead to the next five years, if the market value of USDH can reach 25 billion USD (currently this is still one third of USDC), its annual revenue is expected to reach 1 billion USD. According to the 50% distribution model, this will bring an additional free cash flow of 500 million USD to the aid fund each year, further boosting the value of HYPE to over 400 USD.

It is worth noting that this analysis intentionally excludes two important potential value drivers, HIP-3 and HyperEVM, which are not suitable for cash flow modeling but will clearly provide additional incremental value.