HYPE Thesis (Bullish)
I think we don't need to dive deep into the HYPE bullish thesis a lot, but:
- Best perp dex (yet).
- HIP 4.
- Challenging Binance (which is shooting its own foot)
- ETF/DAT → Increasing investor base.
- 50% down from ATH. Price to earnings of 8. Undervalued.
- HyperEVM → Vaults, lending, DeFi. Value accrual.
- Bull market → Higher volume → Revenue → Buyback & Burn
Macro/Market Thesis (Not Bullish)
Overall sentiment is not bullish.
- Hurst Principle
- Second Presidential Year thesis
- Buffett indicator at 220%
- Hawkish Rate Cut
- Elliott Wave, C wave pullbacks
Overall Trade Thesis
Long HYPE, but limit downside. If crypto goes up, $HYPE & $BTC will win. Need to hedge downside.
Trade Idea #1: Bull Call Spread (5x upside)
Bet on HYPE reaching its ATH, with fixed downside costs, no liquidation/funding risks. Effective 5x if HYPE reaches ATH ($60).
25th December 2026 expiry:
- Buy 27 HYPE CE: Pay premium of $11
- Sell 60 HYPE CE: Receive premium of $5
- Net pay: $6 per HYPE (5x leverage)
| Value | |
|---|---|
| Max Profit | $27 per HYPE |
| Max Loss | $6 per HYPE |
| Breakeven | $33 |
Trade Payoff: Long HYPE at $33, with upside capped until $60 (ATH of HYPE)
Thesis: Bet on HYPE reaching its ATH.
Better than perps: 5x leverage perp long requires similar (higher) cost, same max risk. But carries liquidation risk and costs $2–3 per HYPE in funding costs (assume 10% funding).
Better than spot: 5x leverage, frees up $22 per HYPE to be used for USDC yield. Opportunity cost goes down. (5% yields $1, 10% yields $2). Net premium paid reduces to ~$3, effectively long HYPE at $30, max upside becomes $30 (6x upside).
Trade Idea #2: Call Ratio Spread (Limiting all risks)
Limits further downside to $1 per HYPE, exposes upside risk above $92 (unlikely, and manageable over time).
25th December 2026 expiry:
- Buy 27 HYPE CE: Pay premium of $11
- Sell 50 HYPE CE: Receive premium of $6
- Sell 70 HYPE CE: Receive premium of $4
- Net pay: $1 per HYPE
| Value | |
|---|---|
| Max Profit | $22 per HYPE |
| Max Loss (down) | $1 per HYPE |
| Max Loss (up) | Unlimited above $92 |
| Lower Breakeven | $28 |
| Upper Breakeven | $92 |
Trade Payoff: Long HYPE at $28, with upside capped until $50.
Thesis: Pay only $1 per HYPE.
I already entered Trade #1, and will be adding size over time on dips. I trade on STS Digital's client portal OTC.