HL RADIO #45 - DAVID SCHAMIS (HYPERLIQUID STRATEGIES) - LIVE @ HL SINGAPORE 2026 - HYPERLIQUID STRATEGIES INC

Financial Performance:

• No specific quantitative financial metrics (revenue, earnings, profit margins, or cash flow) disclosed for the current period; discussion focused on operational costs and asset base scaling.
• Management noted that operating costs relative to the asset base have decreased significantly, with amortization benefits expected to be more pronounced in 2026 compared to ETF competitors.
• The company's capital deployment strategy involves issuing shares when the market price-to-NAV ratio exceeds 1.1 and buying back shares when it trades below NAV, utilizing cash reserves to accumulate HYPE tokens during low-NAV periods.
• Trading volume dynamics showed the stock price shifting from below to well above Net Asset Value (NAV) within a single week, validating the disciplined capital management approach.

Guidance and Future Outlook:

• Management predicts the most significant catalyst over the next 12 months will be Hyperliquid's formal entry into the U.S. market, expecting the full operational model to be established within a year.
• Long-term goal involves transitioning from a "fringe" decentralized entity to a core underpinning of the global financial system, contingent on regulatory frameworks and institutional partnerships.
• Future growth is expected to be driven by expansion beyond crypto derivatives into equities, rates, and prediction markets, targeting multi-trillion dollar Total Addressable Markets (TAM).
• The company plans to focus on "big things" that materially move the needle rather than immaterial activities, though specific product launches remain unannounced.

Business Segments and Product Lines:

• HYPE Token Strategy: The fund actively accumulates HYPE tokens via share buybacks when the stock trades at a discount to NAV and issues shares at a premium to NAV.
• Ecosystem Participation: The fund has become a validator on the Hyperliquid ecosystem, a foundational step that management deems small relative to the scale of future initiatives.
• Product Evolution: Explicit intent to evolve the Data Asset Trust (DAT) to provide value beyond simple passive holding, differentiating it from traditional ETFs through active management and unique revenue opportunities.
• U.S. Market Entry: Anticipating commercial and financial deals to facilitate U.S. access, likely involving partnerships rather than a direct crypto-only perpetual exchange model.

Market and Competitive Landscape:

• Competition: Differentiates the DAT model from ETFs by highlighting cost advantages through asset base amortization, where ETF costs remain a fixed percentage regardless of asset scale.
• Market Trends: Identifies the U.S. market entry as the primary industry trend, with speculation that current moves (e.g., Payward/Kraken announcements) are early stages of a broader ecosystem integration.
• Institutional Sentiment: Notable shift in Traditional Finance (TradFi) institutional perception, moving from viewing the ecosystem as "crypto degen" to recognizing its solid foundation and massive TAM.
• Market Share: Aims to capture share in traditional finance sectors (equities, rates) rather than solely competing for crypto market share against entities like Coinbase.

Risks and Challenges:

• Regulatory Uncertainty: The primary challenge is the establishment of a regulatory structure in the U.S. and partners in the E.U.; without this, mass institutional onboarding remains impossible.
• Execution Complexity: The path to U.S. integration involves complex financial deals, commercial partnerships, and regulatory navigation, a process expected to take months to a year.
• Institutional Adoption Friction: Overcoming the education gap with TradFi investors, as explaining the ecosystem's depth requires significant time (45-minute monologues) rather than brief pitches.
• Operational Risk: Avoidance of "stupid things" or immaterial activities that could dilute focus or lose money, emphasizing a conservative approach to new revenue streams.

Management Commentary and Tone:

• Tone: Confident, disciplined, and optimistic; management emphasizes "discipline" in capital allocation despite the "fog of war" in market fluctuations.
• Confidence: Expressed high conviction in the 12-month timeline for U.S. market maturity, predicting that by the next earnings call, the major structural changes will be in place ("in the rear view mirror").
• Narrative: Focuses on the narrative of "education" and "patience," repeatedly stating that "Rome was not built in a day" regarding institutional adoption.
• Self-Description: Management characterizes their approach as avoiding quick wins in favor of "big things that move the needle," signaling a focus on long-term structural value.

Analyst Questions and Answers:

• Q: Is the share buyback/issuance playbook working? A: Yes; the strategy successfully capitalized on a recent week where the stock moved from below NAV to above NAV, leveraging Trump's comments and disciplined execution.
• Q: How will the DAT outperform a simple HYPE ETF? A: By leveraging larger asset bases to amortize costs more effectively than ETFs and by executing active strategies (e.g., validation, potential new revenue streams) rather than passive holding.
• Q: What has been the most significant recent development? A: The impending entry of Hyperliquid into the U.S. market, driven by regulatory evolution and partner deals, expected to unfold over the next year.
• Q: How have institutional views changed? A: TradFi investors are increasingly convinced of the ecosystem's potential after comprehensive education sessions highlighting the non-crypto TAM (equities, rates, prediction markets).
• Q: What is required for Hyperliquid to become core global infrastructure? A: The creation of a working U.S. regulatory structure, engagement with incumbent partners, and a streamlined institutional onboarding experience distinct from decentralized wallets.

Other Key Points:

• The discussion highlighted that the U.S. market entry is not expected to be a simple "crypto-only" perpetual exchange with a single partner but a more complex, multi-faceted arrangement.
• Management explicitly stated they are not ready to announce specific new value-add initiatives but are actively evaluating "obvious areas" to add value to the ecosystem.
• The interview occurred across multiple global locations (New York, Montreal, Singapore), reflecting the fund's international presence.
• Management reiterated that the specific mechanism for U.S. entry will likely involve partners rather than the entity operating as a DCO, DCM, and FCM directly.