Hyperliquid (HYPE) Token Gets a Boost From BitMEX Co-founder Arthur Hayes, Who Frames Its Struggle as a “David vs. Goliath” Battle

Hyperliquid's problems began after alleged whale manipulation of the JELLY token price reportedly led to a short squeeze. This event resulted in potential losses nearing $10 million

Hyperliquid’s HYPE token drew support from BitMEX co-founder Arthur Hayes, who framed the platform’s struggles as a “David vs. Goliath” battle.

Referencing potential Hyperliquid rivals, Hayes said on X (formerly Twitter): “Humans like to see an underdog, like in a David vs. Goliath story, and they humans like to support the underdog vs. a perceived unstoppable opponent. $HYPE for the win!”

The post sparked discussion among crypto traders, with one user commenting on the narrative of rooting for the underdog. In response, Hayes added, “Exactly! Like when a small-time hustler is taking on a large, well-known and funded entity, people will rally around the underdog.”

This observation ties into the recent controversy surrounding Hyperliquid, which began with a whale-led manipulation of the JELLY token, reportedly leading to a short squeeze and potential losses nearing $10 million for the exchange’s liquidity providers (LPs).

However, despite the significant potential LP losses from the manipulated trades, Hyperliquid's liquidity pool (HLP) vault itself reportedly still secured an overall profit of $700K.

Moreover, Hyperliquid’s validator team voted to delist JELLY perpetual contracts and forcibly settle open positions at a predetermined price.

While Hyperliquid has stated it intends to fully refund affected LPs (excluding the alleged manipulators), the decision to intervene and force-settle trades drew significant backlash online.

Critics accused the DEX team of unprofessionalism and centralization, with some drawing comparisons to the arbitrary actions seen during FTX’s collapse.

Echoing these concerns, Bitget CEO Gracy Chen argued that the move—closing a market and dictating a settlement price—set a “dangerous precedent” for decentralized platform interventions.

Adding complexity to the situation, on-chain analyst ZachXBT pointed to potential involvement of Binance-linked wallets in the manipulation scheme.

His findings publicly identified two specific wallet addresses as key players purportedly initiating the JELLY incident, which further sparked speculation about coordinated market manipulation involving larger entities or their associates.

This eventuality, and the potential implications for broader crypto market stability, are among the key discussion points as Hyperliquid navigates the complexities of decentralized exchange management.