Ark Invest’s Director of Crypto Research, Lorenzo Valente, wants popular perp DEX Hyperliquid to acquire the Gemini exchange.
According to Valente, Hyperliquid should take the recent positive signal from President Donald Trump and the CFTC to take its U.S ambition “one step further.”
Acquire a regulated U.S. platform like Gemini and turn it into the de facto regulated HIP-3 and HIP-4 venue in the U.S. For roughly $450M, Hyperliquid could acquire Gemini’s entire U.S. regulatory stack, which I think could be worth ~$200M on its own.
Valente noted that the protocol can fund the move by using about 7.9M HYPE from the massive community reserve of 389M HYPE (2% of the reserve). To replenish the reserve, the analysts recommended redirecting the HYPE buyback.
Hyperliquid generates substantial cash flow and sits on an enormous treasury. It should be much more aggressive about deploying both strategically. Let’s stop the buyback and burns and play offense.
To back his argument, Valente cited similar successful moves by Polymarket (acquired QCEX) and Robinhood’s Bitstamp deal.
Gemini recently got CFTC’s Designated Contract Market (DCM) and DCO (Derivatives Clearing Organization) licenses, allowing it to offer perps and prediction markets onshore.
For Valente, buying the Winklevoss twins-owned exchange would be a “strategic” move to acquire its regulatory stack and ringfence it for U.S-based Hyperliquid users.
Hyperliquid: What’s next if U.S access is allowed?
Following reported discussions with U.S regulators, Hyperliquid has been screening against wallets linked to sanctioned entities.
Additionally, the DEX has been testing Stars or KYC-based (know your customer) feature.
Many speculated that this was likely a preparation for a regulated interface for the DEX for U.S users. It remains unclear which pathway Hyperliquid will follow for U.S market access.
But the DCM route floated by Ark Invest is reportedly being explored by rival Lighter protocol.
However, Lighter still has a lot of catching up to do. Currently, Hyperliquid controls 45% market share (including TradeXYZ volumes) while Lighter has a 9% dominance.
That said, HYPE blasted +25% yesterday on Trump comments. It has since extended the rally to 28% after hitting $75 and could print a new all-time high. If so, the next key upside targets would be $82 and $92.
Final Summary
- Ark Invest sees the Gemini exchange acquisition as the best bet for Hyperliquid’s U.S market access
- The DEX has initiated sanction screening and is exploring a KYC-based front-end for regulated access
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