TLDR:

• HyperCore burned 49,360.33 HYPE at ~$35.09 on April 2, pushing the protocol into net deflationary territory.
  
• Even with 26,665 HYPE distributed to stakers and validators, net circulation still dropped by 17,075 tokens.
  
• Hyperliquid’s annual deflation rate stands at ~6.15M HYPE, contrasting sharply with Solana’s 25.19M SOL inflation.
  
• The HIP-3 flywheel ties protocol revenue directly to buybacks, creating self-sustaining and organic supply reduction.

Hyperliquid recorded a net removal of 17,075 HYPE tokens from circulation on April 2, 2026. HyperCore repurchased and permanently burned 49,360.33 HYPE at an average price of approximately $35.09.

Alongside this, HyperEVM gas fees contributed an additional 146.43 HYPE to the burn total. Even after distributing 26,665 HYPE as staking and validator rewards, the protocol remained firmly in net deflationary territory for the day.

Buyback Mechanism Drives Daily Deflationary Pressure

The April 2 activity placed Hyperliquid’s annualized deflation rate at roughly 6.15 million HYPE per year. On a monthly basis, that translates to approximately 512,262 HYPE removed from circulation.

These figures reflect a consistent pattern emerging from HyperCore’s revenue-backed buyback program. The numbers stand in sharp contrast to Solana, which inflates by around 25.19 million SOL annually through staking and validator rewards.

HyperCore’s buyback model operates on a price-sensitive basis, which makes it naturally self-adjusting. When HYPE prices rise, fewer tokens are repurchased with the same revenue.

Conversely, when prices fall, the same revenue buys and burns more tokens. This mechanism creates a built-in buffer against extreme supply pressure at different points in the market cycle.

The burn also accounts for a worst-case assumption regarding team token unlocks. Hyperliquid Labs is allocated 173,000 HYPE per month in vesting, equal to about 5,766 HYPE per day.

Even if this entire allocation were sold into the market, the protocol would still achieve net deflation under the current numbers. That assumption was already factored into the 17,075 HYPE net removal figure.

This structure sets Hyperliquid apart from many protocols that rely on token emissions to incentivize participation.

Here, buybacks are funded by actual trading revenue from HyperCore, not newly minted supply. That distinction matters when evaluating the long-term sustainability of the deflationary model.

HIP-3 Adoption Strengthens the Protocol’s Revenue Flywheel

Greater adoption of HIP-3 is central to sustaining and potentially accelerating this deflationary trend. As more users trade through the protocol, activity increases and so does revenue.

Higher revenue, in turn, supports larger buybacks and more burns. The cycle reinforces itself without depending on external capital injections.

This flywheel effect ties protocol growth directly to supply reduction. Each new participant adds to the trading volume that funds the next round of buybacks.

Over time, this creates persistent and organic buy pressure on HYPE. The pressure comes from protocol economics, not from speculative demand or marketing cycles.

Trading activity on HyperCore feeds directly into the buyback pool used for burns. The April 2 figures show that this model is already producing measurable results at current price levels.

As HIP-3 usage grows, the mechanism is designed to scale accordingly. The connection between adoption and deflation is direct and quantifiable.

Validators and stakers received 26,665 HYPE in rewards during the same period. That distribution ensures continued network participation while the broader supply still contracts.

The balance between rewarding contributors and reducing circulating supply appears to be working as intended on April 2.

Ethereum stayed near $2,050 on April 4 as traders weighed price resistance, ETF outflows, and fresh staking activity from the Ethereum Foundation. 

On-chain data showed that the Ethereum Foundation staked about 69,500 ETH in less than two months. At current prices, that amount stood above $140 million. The group had earlier said it planned to use staking to support research, development, and broader ecosystem work through yield.

The latest move involved 45,034 ETH sent on Friday in batches of 2,047 ETH to the Eth2 Beacon Chain deposit contract. Arkham data also showed the Ethereum Foundation holding more than 102,000 ETH, while its treasury across 14 addresses was valued at about $270 million.

While the foundation kept adding staked ETH, US spot Ethereum ETFs continued to record net withdrawals for most of the recent period. The funds saw eight straight sessions of outflows before posting a small net inflow of about $5 million on March 30.

Another positive day followed on March 31 with $31.17 million in net inflows. Still, the trend turned negative again after later sessions posted $7.1 million and $71.17 million in outflows. That left the week in the red, with more than $42 million leaving the products.

Analysts watch key ETH price levels

Analyst Crypto Patel said Ethereum had stayed between $1,500 and $4,100 for nearly five years. He compared the current structure with the 2018 to 2020 range and said a breakout could lead to a much larger move if history repeats.

That view added to wider market debate, but short-term traders remained focused on nearer resistance and support levels. ETH traded at $2,050.69, with a 24-hour trading volume above $6 billion, a daily gain of 0.12%, and a seven-day increase of 2.59%.

In addition, analyst Ted Pillows said Ethereum needs to break above the “$2,100-$2,150” area to restart stronger upside momentum. He noted that ETH moved close to $2,400 a few weeks ago but failed to hold that advance and slipped back below the key zone.

He also warned that a drop below the “$2,000” support level could trigger a long liquidation event.

TLDR:

• Metaplanet added 5,075 BTC to permanent holdings in Q1 through a structured options income rotation system.
• The firm generated $18.63 million in options income, reducing its net Bitcoin cost to roughly $76,227 per coin.
• MicroStrategy acquired 89,599 BTC at $80,929 average, while Metaplanet’s net cost came in nearly $4,700 lower.
• Metaplanet separates Bitcoin into two buckets — income generation and long-term holdings — never mixing the two.

Metaplanet, the Japanese hotel company turned Bitcoin treasury firm, has drawn attention after shifting to quarterly Bitcoin purchase announcements.

The company added 5,075 BTC to its permanent holdings in Q1 2025. Its average purchase price came in near $79,898.

Meanwhile, a detailed breakdown from a prominent analyst suggests the firm may have outperformed MicroStrategy, widely regarded as the benchmark for corporate Bitcoin acquisition.

Metaplanet’s Two-Bucket Bitcoin System Explained

Metaplanet reportedly operates two distinct Bitcoin buckets. One is dedicated to income generation, and the other holds long-term Bitcoin positions.

According to analyst Ragnar, the two buckets remain strictly separate. Long-term holdings are never exposed to options contracts under this structure.

The income generation bucket works through a rotation of cash-secured puts and covered calls. When the team holds cash, they sell put options below the current Bitcoin price.

If Bitcoin stays above the strike price minus the premium, the puts expire and the premium is collected. This process repeats weekly, compounding returns over the quarter.

If Bitcoin falls below that threshold, Metaplanet gets assigned and acquires Bitcoin below market price. At that point, the team pivots to selling covered calls against those holdings.

The calls either expire, generating more premium, or get assigned, returning the position to cash and restarting the cycle.

At the quarter’s close, the team transfers the accumulated Bitcoin into the permanent holdings bucket. This transfer marks the official addition to their long-term treasury, which is what gets announced publicly each quarter.

Q1 Numbers Show Metaplanet Acquired Bitcoin Cheaper Than MicroStrategy

The Q1 figures offer a clearer picture of performance. Metaplanet generated $18.63 million in income from its options activity during the quarter.

Dividing that by the 5,075 BTC added to permanent holdings gives roughly $3,671 of income per Bitcoin acquired.

Ragnar’s post breaks this down further. Subtracting the income generated from the average purchase price of $79,898 brings the effective net cost to approximately $76,227 per Bitcoin.

That figure excludes direct capital deployment and accounts only for options-based income offsetting acquisition costs.

By comparison, MicroStrategy purchased 89,599 BTC in Q1 at an average price of $80,929. That puts Metaplanet’s net cost roughly $4,700 lower per Bitcoin when income generation is factored in. Even without that adjustment, Metaplanet still came in around $1,000 cheaper per coin.

Ragnar noted that Metaplanet achieved this result while its preferred share structure still awaits approval. The analyst added that he remains more bullish on the company following this analysis, though he clarified the post represents personal speculation pending confirmation from the Metaplanet team.

Block plans to revive the Bitcoin “faucet” model on April 6 through a new site, btc.day, as Jack Dorsey pushes another public effort tied to Bitcoin access and education. 

The site already shows a countdown timer, an orange faucet symbol, and the phrases “The Faucet is Back” and “Buy, Secure, Spend.”

Dorsey announced the move on Friday through an update tied to Bitcoin at Block. The company said the faucet will return through btc.day, though it has not yet shared the full rules for how users will claim free Bitcoin.

The website does not currently ask users to complete any task. It only shows a timer and basic branding linked to the old faucet idea. Block has also not said how much BTC it plans to distribute.

The faucet model dates back to 2010, when software developer Gavin Andresen used it to introduce people to Bitcoin. His original site gave users five BTC after they completed a captcha and entered a wallet address.

At that time, Bitcoin was new and had little public reach. Early builders used simple tools like faucets to help people test wallets, send coins, and learn how the network worked. The model later became part of Bitcoin’s early history.

In addition, the new rollout appears to borrow from that original approach. By bringing back the faucet concept, Block is linking a modern campaign to one of Bitcoin’s best-known early distribution methods.

The company has not confirmed whether the new version will use captchas, wallet checks, or any other participation step. It also has not said whether the giveaway will be open globally or limited to specific users or regions.

Community watches for more details

Crypto users have started discussing the relaunch across social platforms. Some described the move as a way to keep Bitcoin more accessible, while others pointed to the larger number of wallet users today compared with 2010.

The market is now waiting for details on the size, timing, and structure of the giveaway. Block held 8,883 BTC as of its accumulation record dating back to October 2020, but neither Dorsey nor the company has said how much of that Bitcoin, if any, will be used for the faucet.

Key takeaways:

• Bitcoin hitting $72,000 would liquidate $2.5 billion in shorts, potentially crushing bears who are overleveraged.

• Iran’s war and high oil prices currently pressure BTC, but a ceasefire or ETF inflows could spark a rapid recovery.

$2.5 billion in shorts at risk if BTC hits $72,000

Bitcoin (BTC) has consistently failed to hit new highs since attempting to reclaim the $75,000 level since March 17.

Bearish Bitcoin futures bets have been piling up as the war in Iran pushed oil prices to their highest levels since June 2022. However, two events could propel Bitcoin to $72,000 in the coming weeks and help cement a sustainable bull run.

According to Coinglass estimates, a total of $2.5 billion in short positions on Bitcoin futures will be liquidated if Bitcoin rises just 7.5% to $72,000 from the current $67,100 level.

BTC bears benefit from miners’ sales, weak S&P 500

Bears have been adding shorts since March 25, when Iran reportedly refused to negotiate a ceasefire. Additional selling pressure emerged as MARA Holdings (MARA US) announced it sold 15,133 BTC on March 26. The publicly listed Bitcoin miner shifted its focus to AI computing and chose to reduce its Bitcoin holdings to pay down debt.

After peaking near 7,000 points on Jan. 28, the S&P 500 dropped 10% by March 30. Investors fear recession risks because central banks have less room to cut interest rates due to inflation.

Oil prices have jumped over 70% since the war in Iran started in late February, which hikes logistics costs and cuts into consumer spending.

Traders are pricing in 89% odds that the Fed will keep interest rates steady through September, with 5% odds of a hike to 4%.

In early March, bond futures showed the opposite, with 79% odds of rate cuts. Returns on fixed-income investments will likely stay attractive for longer.

Meanwhile, confidence among Bitcoin bears has increased, as reflected by the negative funding rate in perpetual futures contracts.

In neutral market conditions, longs usually pay to keep positions open, causing this indicator to range between 5% and 10% to compensate for capital costs.

Negative funding rates signal a lack of demand for bullish leveraged bets and potential overconfidence from the bears.

Ceasefire or economic weakness may boost Bitcoin

While it is impossible to predict the outcome of the war involving Iran, a ceasefire agreement could spark bullish sentiment and catch bears by surprise.

Bitcoin jumped from $69,150 to $74,900 during the five days ending March 16 after US-listed Bitcoin exchange-traded funds saw $1.5 billion in net inflows over two weeks. If ETF inflows resume, Bitcoin could also reclaim the $72,000 level.

Related: Bitcoin ETFs ‘will be larger’ than gold ETFs–Analyst

US President Donald Trump has asked Congress to boost defense spending to $1.5 trillion, according to a 2027 budget proposal released Friday. These plans include a 10% cut in other areas to offset military expenses.

Trump reportedly said at a private White House event on Wednesday: “We’re fighting wars. We can’t take care of day care,” according to CNBC.

If the US economy loses steam, or if private credit redemptions continue to pressure the market, investors will likely look for alternative hedges.

Consequently, Bitcoin’s appeal would grow as the it presently trades 47% below its all-time high. Thus, a bull run to $72,000 might happen regardless of how long the war in Iran lasts.