A digital asset treasury company formed through an unprecedented biotech-to-crypto merger has filed with federal regulators to raise up to $1 billion, signaling growing institutional appetite for decentralized exchange tokens beyond Bitcoin and Ethereum.
Hyperliquid Strategies Inc. submitted an S-1 registration statement with the U.S. Securities and Exchange Commission on Wednesday to issue up to 160 million shares of common stock, with proceeds earmarked for accumulating additional HYPE tokens - the native cryptocurrency of the Hyperliquid decentralized perpetual futures platform. Chardan Capital Markets will serve as financial advisor for the offering.
The capital raise represents the latest development in a transformative $888 million reverse merger announced in July between Nasdaq-listed Sonnet BioTherapeutics and Rorschach I LLC, a special purpose acquisition vehicle backed by heavyweight crypto investors including Paradigm, Galaxy Digital, Pantera Capital, D1 Capital, Republic Digital, and 683 Capital.
Corporate Crypto Treasury Strategy Gains Momentum
Hyperliquid Strategies currently manages 12.6 million HYPE tokens valued at approximately $583 million at the time of the merger announcement, plus $305 million in cash reserves. The company plans to use the new capital to substantially increase its HYPE holdings and stake a significant portion to generate ongoing staking rewards.
"HSI's move sends a strong bullish signal for HYPE," Shivam Thakral, CEO of Indian crypto exchange BuyUCoin, told Decrypt. He added that institutional accumulation through the digital asset treasury could bolster demand, scarcity, and long-term confidence in the Hyperliquid ecosystem.
The merger structure significantly dilutes existing Sonnet shareholders, who will retain only 1.2% of the combined entity. Current Rorschach owners and new investors will control approximately 98.8% of Hyperliquid Strategies upon completion of the transaction, expected to close in the second half of 2025.
Former Barclays CEO Bob Diamond, co-founder and CEO of Atlas Merchant Capital, will assume the chairman role, while David Schamis, Atlas CIO and co-founder, will serve as chief executive officer. The board will also include Eric Rosengren, former president of the Federal Reserve Bank of Boston.
Market Reaction and Technical Outlook
HYPE token prices surged approximately 8-10% in the 24 hours following the filing announcement, trading near $38 as investors reacted positively to the institutional backing. However, the token remains below key technical levels after a broader market selloff earlier this month triggered by escalating U.S.-China trade tensions.
Hyperliquid Strategies joins a growing cohort of public companies building substantial crypto treasuries focused on assets beyond Bitcoin. Eyenovia and Lion Group Holding have similarly integrated HYPE into their balance sheets this year, reflecting broader corporate adoption of decentralized finance protocols.
Hyperliquid's Market Dominance
The strategic focus on HYPE tokens capitalizes on Hyperliquid's commanding position in the rapidly expanding decentralized perpetual futures market. Decentralized perpetual exchanges surpassed $1 trillion in monthly trading volume for the first time in September 2025, marking a 48% increase from August's $707.6 billion.
While facing intensifying competition from upstart platforms like Aster and Lighter, Hyperliquid has maintained its position as a market leader. The platform accumulated approximately $280 billion in perpetual trading volume during September, securing second place behind Aster's $493.61 billion.
Despite the shifting competitive landscape, Hyperliquid's market share in the on-chain perpetual futures space has historically commanded 60-70% of total volume, with the platform processing billions in daily trading activity. The protocol operates on a custom Layer 1 blockchain designed specifically for high-performance derivatives trading, enabling sub-second transaction finality and supporting leverage up to 50x.
Revenue Generation and Buyback Programs
Hyperliquid has emerged as one of the highest revenue-generating protocols in decentralized finance. In August 2025, the platform generated $106 million in monthly revenue, exceeding any other DeFi protocol at the time. The platform uses approximately 97% of its fee revenue to buy back HYPE tokens, accumulating over $644 million in buybacks and repurchasing 21.36 million tokens to date.
This buyback mechanism reduces circulating supply while signaling long-term commitment to the ecosystem, though analysts note that upcoming token unlocks could create short-term price pressure. The HYPE token has a total supply of 1 billion tokens, with approximately 38% allocated for community rewards distributed through the platform's usage incentive programs.
Regulatory Considerations and Risks
The SEC filing acknowledges several material risks, including enhanced regulatory scrutiny of crypto-focused public companies, the highly volatile nature of cryptocurrency prices, and potential correlation between the company's stock price and HYPE token valuations.
The reverse merger structure - where a biotech firm pivots to become a cryptocurrency treasury company - represents a novel approach to bringing digital asset strategies into traditional capital markets. Sonnet BioTherapeutics will continue operating as a wholly owned subsidiary, maintaining development of its oncology drug candidate SON-1010 while exploring partnerships for its remaining biotech assets.
Legacy Sonnet shareholders will receive contingent value rights tied to potential future proceeds from the biotech subsidiary, though the primary business focus shifts decisively to digital asset management.
Broader Implications for Crypto Markets
The filing underscores a maturing trend of traditional companies using public equity markets to build crypto treasuries focused on protocol-specific tokens rather than just Bitcoin or Ethereum. While such strategies have historically boosted share prices in the near term, questions remain about long-term sustainability during cryptocurrency bear markets.
However, Hyperliquid's fundamental strength as one of the most actively traded venues for perpetual futures provides a potentially more resilient foundation than speculative altcoin accumulation. Perpetual futures contracts - derivatives without expiration dates - have surged in popularity due to 24/7 trading access, high leverage options, and the ability to profit in both bullish and bearish market conditions.
As institutional capital continues flowing into decentralized finance infrastructure, Hyperliquid Strategies' billion-dollar raise may establish a template for other protocols seeking to bridge traditional finance and cryptocurrency ecosystems through public market vehicles.