Hyperliquid Has Bought Back $1.26 Billion of Its Own Token. Ethereum Burns Its Fees Instead. Which One Holds Its Price Better?

Hyperliquid (CRYPTO:HYPE) uses fees collected from trades on its exchange to buy back its own token, spending over $1.26 billion on buybacks to date. In contrast, Ethereum (CRYPTO:ETH) follows a different approach by permanently removing a portion of every transaction fee from circulation through a burn process.

As of October 10, 2026, Hyperliquid reported a protocol revenue surpassing $1.4 billion, with its buybacks now exceeding $1.26 billion. As of October 14, HYPE trades at roughly $80, down 1.9% over the last 24 hours and 9.2% over the past week. Similarly, Ethereum is trading around $2,441, down 5.0% in the same week.

Despite these declines, HYPE is only 18.5% below its all-time high of about $98, one of the smallest declines among major cryptocurrencies. In contrast, Ether is trading 50.7% below its peak. This raises an important question. Which strategy is more effective in maintaining a token’s price?

How Hyperliquid’s Buybacks Differ From Ethereum’s Fee Burn

A buyback functions similarly to a company repurchasing its own stock. Hyperliquid collects fees from traders and uses that revenue to buy HYPE tokens directly from the market, reducing supply while providing buy support.

On the other hand, the fee burn method operates differently. Ethereum destroys part of every transaction fee by sending it to an unowned address, meaning those coins are gone forever. The network spends no money buying tokens, and while it reduces supply, it does not create additional demand.

Both strategies aim to decrease the number of tokens available. However, buybacks not only remove tokens from circulation but also create buy orders in the market. In contrast, a burn quietly reduces supply without generating new demand. Since 2024, Ethereum’s burn rate has been lower than the new ETH distributed to validators, resulting in a slight increase in ETH’s total supply.

HYPE Trades Far Closer to Its Record Than ETH

When looking at drawdowns—how much a coin trades below its all-time high—HYPE shows much stronger performance. It’s currently 18.5% below its record price, while ETH is 50.7% below its peak. By this measure, Hyperliquid’s buyback model appears to have supported its price more effectively.

However, these two tokens differ in size and maturity. Ethereum’s market cap stands at around $298 billion, compared to Hyperliquid’s modest $17.8 billion. Ethereum has also weathered multiple boom-and-bust cycles, including significant market corrections, whereas HYPE has not yet faced a prolonged downturn. Thus, comparing drawdowns may offer only indirect insight into each strategy’s effectiveness.

In the short term, recent trading patterns tell a different story. HYPE lost 9.2% over the past week, nearly double Ethereum’s 5.0% loss. Nevertheless, HYPE is still up by 1.6% over the last 30 days, while ETH is down by 0.8%. Buybacks create demand but can still be overshadowed by broader selling pressure.

Hyperliquid’s Buybacks Depend on Trading Activity

Hyperliquid’s buyback capacity is directly linked to the trading activity on its exchange. During prolonged bear markets, trading tends to decline, limiting the amount available for buybacks. Interestingly, buybacks are most effective when the market is bullish and less needed, yet they tend to decrease when support is most critical.

Ethereum’s burn is also constrained by network activity, as fewer transactions mean fewer fees to burn. However, unlike buybacks, burns have no active buying support. Consequently, ETH holders rely on external demand, such as treasury companies and Ether funds, and those funds faced outflows for ten consecutive sessions before seeing some inflow on October 13.

Do Hyperliquid Buybacks Hold Up Better Than Ethereum’s Burn?

Hyperliquid’s buybacks seem to support HYPE’s price better than Ethereum’s fee burn supports ETH. HYPE is trading much closer to its all-time high and has maintained a modest gain over the last month, despite a sharp weekly decline. Still, HYPE’s smaller drop from its $98 record may not reflect the buyback strategy’s effectiveness, as factors like HYPE’s recent introduction and smaller market size may play a role.

For holders of either token, monitoring trading revenue is essential. Hyperliquid can invest in buybacks only from fees collected from traders, so a sustained drop in trading activity could limit future buybacks. Our perspective may shift if HYPE’s distance from its $98 peak widens toward ETH’s 50.7% while Hyperliquid’s buyback total stagnates. If HYPE recovers above $98 and buybacks continue to grow, this model could prove more robust.

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