Hyperliquid Strategies Interview – “Rethinking Financial Rails” by Forward Guidance

Introduction: Hyperliquid Strategies Interview

Following the success of our interview recap with Keisan, Monk, and the leadership of Hyperliquid Strategies (Bob Diamond & David Schiamis), we decided to do it again, this time summarizing Bob and David’s latest discussion with Felix on Forward Guidance.

By way of background, Bob and David are two seasoned TradFi veterans with long careers in private equity and financial services. Bob is the former CEO of Barclays and currently the Founder and CEO of Atlas Merchant Capital, while David is Atlas’s Founder and CIO. Atlas is a private equity firm focused on investments in financial services businesses.

Both have a strong technology background in finance. Bob began his career in Morgan Stanley’s tech division, while David started at Salomon Brothers. According to Bob, blockchain represents a major paradigm shift that will, within a decade, become the core infrastructure supporting the convergence of traditional and modern finance.

David first bought Bitcoin back in 2015. Although skeptical at the time, he argued publicly on CNBC that allocating at least 1% of a portfolio to BTC made sense. At the time he was mocked, but in hindsight his view has proven remarkably prescient. Bob and David later became early investors in Circle, recognizing ahead of the curve the transformative role of stablecoins.

Over the years, they have reviewed hundreds of crypto opportunities but have only truly committed to one: Hyperliquid. Their conviction speaks volumes about the scale of the opportunity they see. Hyperliquid’s explosive growth in decentralized trading inspired them to launch Hyperliquid Strategies, a Digital Asset Treasury (DAT) company focused on HYPE.

When two TradFi heavyweights are WhatsApping each other at midnight out of excitement about Hyperliquid, it shows clearly that this is not just another investment. It is a rare opportunity.

According to David, one of the most compelling financial rail innovations is what Hyperliquid has built. In a very short period of time, they created not just a system that works for their own use case, but an open infrastructure that anyone can build on in a fully permissionless way. This is fundamentally different from how traditional financial services operate.

For example, partnering with a bank like J.P. Morgan requires dozens of meetings, legal reviews, extensive documentation, and months of negotiation before even a basic collaboration can go live. It is an incredibly inefficient process. By contrast, Hyperliquid enables developers to plug directly into its infrastructure through builder codes, allowing partnerships to go live within days. This is how products like Phantom Perps and Rabby Perps have already emerged, with MetaMask Perps coming soon.

Another strong example is HIP-3, which allows any project to create its own perpetual exchange on top of the Hyperliquid backbone in a fully permissionless way. One HIP-3 market that David finds particularly interesting is Ventuals, which lets users trade pre-IPO stocks. He notes that the traditional IPO process often favors investment banks’ buy-side clients, resulting in sharp price jumps once trading begins. A perpetual market for pre-IPO stocks, by contrast, enables real price discovery and makes it much harder for banks to underprice offerings relative to market demand. This, in turn, could have meaningful implications for capital markets and, more broadly, for the global economy.

These examples highlight how blockchain technology, and Hyperliquid specifically is not just replicating existing financial rails but creating entirely new ones that are faster, more open, and more efficient.

According to David, perpetual swaps, or perps, were first conceived in the late 1980s and early 1990s as a way to create markets for assets without a clear or liquid spot market. Ironically, in recent years they have gained popularity for the opposite reason. They are now widely used in crypto markets such as BTC and ETH, where spot markets are extremely active. The appeal lies in their efficiency as a tool for gaining leveraged exposure to an underlying asset.

What makes them particularly compelling is the funding rate mechanism. Since perpetual swaps do not have a fixed expiry date, the funding rate serves as the balancing force between the perp price and the spot price. This continuous adjustment ensures the perp price remains anchored closely to the underlying asset’s spot value.

This mechanism is ingenious, as it keeps the market efficient without requiring settlement or delivery. It enables highly liquid, continuous leveraged trading of assets, which explains why perpetual swaps have become one of the dominant derivative instruments in crypto.

According to David, his view on corporate versus public blockchains is mixed. On one hand, two of the companies he has invested in are Circle and Hyperliquid. Circle recently announced in their earnings that they intend to launch their own chain, and David completely understands why. If someone has an issue with a transaction involving USDC, it is very difficult for Circle to intervene when they do not control the underlying infrastructure. Having their own chain gives them more control and the ability to provide a better user experience.

Hyperliquid, on the other hand, launched from day one with its own L1. That, according to David, is part of the beauty of the project. The chain was purpose-built to support what they are building and to enable other innovations to be developed on top of it.

That said, David also finds something concerning about moving toward a world where every crypto company develops its own blockchain. It starts to resemble the traditional financial system where every bank has its own rails, which runs counter to the promise of interoperability and openness that blockchain was supposed to deliver.

From his perspective, it will be interesting to watch how this plays out. Hyperliquid has built a chain that makes sense and adds real value, but not every company launching a chain can say the same. Ultimately, David believes the market will decide which ones succeed, and competition will filter them in an efficient way.

The plan behind Hyperliquid Strategies is really built on three pillars.

First, as David points out, despite the growing excitement around Hyperliquid, very few people truly understand the scale and long-term potential of what has been built. In less than three years, with only ten employees and zero external capital, Hyperliquid has become one of the fastest-growing crypto exchanges in the world. Today it is generating between one and one and a half billion dollars in free cash flow on an annualized basis. That is remarkable by any standard.

Second, the token structure itself is revolutionary. Hyperliquid carried out an airdrop and announced that the vast majority of its free cash flow would be used to buy back that token. As of today, the buyback rate is 99%, executed automatically every single day. In traditional finance, this is almost unthinkable. Normally a company earns revenue, then at year-end the board meets to decide whether to reinvest, pay dividends, or buy back shares. Hyperliquid has automated this process in a way that has never been seen before.

Third, from Bob’s perspective, this represents an extraordinary investment opportunity. HYPE is the only token in the top ten that is not a decade old. Its explosive growth, cash generation, and buyback model mean that the price has significant appreciation potential. The challenge has been that U.S. investors in particular cannot easily access the token because Hyperliquid Exchange is not available in the States. Hyperliquid Strategies solves that problem by providing access through a Digital Asset Treasury vehicle that will be publicly listed on Nasdaq.

In short, the mission of Hyperliquid Strategies is to open access to what is arguably the fastest-growing token in the industry, one that generates real yield and is rapidly taking market share.

What makes HYPE so interesting is that, relative to most tokens in the industry, it can actually be analyzed through traditional financial metrics such as price-to-free-cash-flow or EV-to-earnings. Crypto has always been known for high growth, but it has rarely been associated with reasonable or compelling valuations. HYPE is one of the first to combine both.

At current levels, HYPE trades at a very attractive valuation, nowhere near the multiples you see with companies like Coinbase. There are reasons for this discount. The token is not easily accessible in the U.S., and structurally it is still a token, which many traditional investors are not yet accustomed to allocating to.

From our perspective, this is precisely what makes it so compelling. We approach investing from a value style rather than a venture capital mindset. We want rational investments: reasonable valuations combined with strong growth expectations. HYPE fits that profile perfectly, which is why we see it as almost too good to be true.

From Bob’s perspective, we are operating in a very supportive macro and political environment for crypto. Retail adoption is accelerating, but more importantly institutional adoption is as well. The skepticism and fear that once surrounded blockchain and digital assets have largely faded, and today some of the largest financial institutions and banks are embracing the technology. That marks a real inflection point for the industry.

David adds an important nuance. With any new technology, it is critical not to create solutions for problems that do not exist. For example, we are not yet at the stage where it makes sense for a bank like Citi to tokenize its shares and trade them on-chain, because there is no real need for that today. What does make sense, however, are use cases like trading pre-IPO stocks, which solves a real problem in price discovery. That is exactly the kind of innovation Hyperliquid is enabling, and it cannot currently be done anywhere else.

Bob’s view is that the rising U.S. debt is like a dark cloud hanging over the economy. It has been largely ignored for years, yet since the first Trump administration the outstanding debt has more than doubled. This represents a real challenge ahead, but he believes that financial innovations, including those enabled by blockchain, will ultimately be a net positive in addressing broader macroeconomic pressures.

David takes a more cautious stance. Expecting stablecoins alone to solve the U.S. debt problem is, in his view, overly optimistic. As he points out, when one dollar goes into USDC, it is still fundamentally just one U.S. dollar, so there is no immediate effect on the debt itself. Where it could become meaningful is if adoption continues to grow globally, not just in the U.S., and large amounts of euros or other foreign currencies are converted into stablecoins backed by U.S. Treasuries. That could create incremental demand for U.S. debt, but it is still too early to draw firm conclusions. 

More broadly, it is not a new idea to suggest that the U.S. dollar could serve as the world’s reserve currency. What is striking today is that the conversation has shifted, with many now worrying about the opposite scenario.

Together, their perspectives suggest that while stablecoins and other innovations may play a constructive role, they should be seen as part of a broader financial evolution rather than a direct solution to the U.S. debt challenge.