Markets Bounce Back, The Hyperliquid Thesis and Kraken Raises $200M

Summary

• Hyperliquid has become Wall Street’s entry point into crypto, per Jason Yanowitz: “This is the most interested I’ve seen traditional, specifically hedge fund managers in crypto since Paul Tudor Jones called Bitcoin the fastest horse in the race” — May 2020. A “massive” fund manager who couldn’t hold HYPE in his mandate bought the Hyperliquid DAT instead, now one of his biggest positions, as “one of the few uncorrelated things I can buy right now” versus his crowded AI book.
• Santi’s on-record calls: commodities flip Bitcoin as Hyperliquid’s largest open-interest category later this year, and HYPE at $25B has “a clean path” to $100B and top-five crypto status. Commodities are already second at 17% of OI (BTC 25%, ETH 16%), and the multiple question is whether revenue from commodities/TradFi trading should be valued the same as Solana’s memecoin-driven earnings. Santi gives a roughly 30–40% chance of US approval; Jason says approval could mean “boom, instant rerating,” against a $117B CME comp.
• Weekend markets are the mechanism: TradeXYZ is the only live price-discovery venue when TradFi closes, with billions in weekend volume and a 50bps median error predicting Monday’s open after the Iran attack sent oil volume and open interest soaring on Hyperliquid. The episode calls TradeXYZ prices “the most informative signal in finance” relative to the Friday close — the same lightning-in-a-bottle moment Polymarket got from the contested election.
• The tape backdrop is historic: the S&P 500’s 9.8% 10-day run sits in the 99.7th percentile of all 10-day returns since 1950, with NASDAQ up ten straight sessions. Jason attributes crypto’s rerate partly to CLARITY Act odds moving from 50/50 to ~60/40–65/35, while Santi’s stance is simply “if you’re optimistic, you are positioned well.” Jason’s tradeable meta-lesson from the Aschenbrenner episode — 1.6M views on his notes, zero positions taken, while Leopold’s fund reached $5.5B and FTX’s 7.8% Anthropic stake at the $800B raise “would now be worth more than all of Coinbase.”
• Regulatory and news flow was constructive: the SEC said certain self-custodial DeFi interfaces fall outside broker-dealer rules via a new “covered user interface” category, and Tether put $127M of a nearly $150M package into Drift’s $285M hack recovery, structured so users earn back losses by trading with USDT. Both hosts read Drift as a Tether win and a Circle/USDC loss; MicroStrategy funded a close-to-14K BTC purchase with proceeds from an ATM offering of its STRC perpetual preferred, which pays an 11.5% dividend and brings holdings toward 780K BTC at a $75K cost basis.
• Kraken took Deutsche Börse’s $200M at $13.3B — down from $20B, with Jason guessing at a roughly 35% secondary/common discount — and its IPO timing may depend on SpaceX: “a huge detonator, good or bad, for the market.” Santi’s through-cycle exchange framework ranked Robinhood #1, Coinbase #2, Kraken #3 on operating leverage, but post-Arjun he calls Kraken “a very well-run machine” that “can grow into a Coinbase type of outcome” and may buy secondary.
• Santi’s bear case for everything else: L2s are a “melting ice cube,” and this cycle “you’re going to see protocols genuinely go to zero” — no more dust-becomes-moon. Exhibit A is Jason’s Scroll investment: Scroll’s data-publishing fees rose ~1000x during EtherFi’s migration of 70,000 cards to Optimism — with timing Jason calls suspicious and the on-chain data “pretty damning” — leaving Scroll at $45M FDV, below its first round. Santi’s three portfolio theses: unmet ex-US stablecoin demand, a more volatile world, and an affordability crisis — “position yourself accordingly.”

Deep dive

1. The rarest 10-day tape since 1950 — and the discipline of just staying long

• Jason’s stat: the S&P 500 is up 9.8% in ten days — the 99.7th percentile of all 10-day returns in history, “unlike any 10-day period in the market since 1950” — with the NASDAQ logging its 10th consecutive gain, something that happens roughly once every five to seven years. Santi’s honest frame: “If you’re optimistic, you are positioned well. I don’t know where this ends or how it ends or if it will end or if this is a new paradigm.”
• Both see a skittish-but-bid market: “people don’t really know how to underwrite AI, good and bad, in their models,” fear and excitement as “two sides of the same coin,” and a tape that behaves like “a runaway train.”
• On positioning, Santi says he’s “a bag holder,” rode Robinhood from $10–15 to ~$125, and is still holding. Jason says he’s buying more Robinhood. Santi also bought “a bunch of DoorDash” off his spend-tracking heuristic.
• The alpha parable, as told: a multibillion-dollar manager visiting Santi’s freshman class said his best trades came from his kids — daughter wants an iPhone, he buys Apple; her friends are hooked on Snapchat, he does an early round. “Every year you get older, it’s harder and harder to get alpha.” Companion story: the fund that went long Mattel off Barbie’s Reddit reviews when Rotten Tomatoes said the movie was bad.

2. Aschenbrenner: everyone read the essay, almost nobody put the trade on

• Jason’s setup of Leopold Aschenbrenner’s four-hour podcast: Jason says Aschenbrenner “called it two years ago” in Situational Awareness — AGI arriving faster than consensus, labs that should be nationalized, and an arms-race framing “no different than nuclear” — with audible nervousness: “there’s a handful of people that really understand how far this is going to go and how fast.”
• Jason’s confession — the episode’s best mid-curve lesson: his notes thread did 1.6M views and ~10,000 bookmarks. “I took notes on the whole essay. I didn’t buy anything.” Meanwhile, Santi says Leopold’s fund is at $5.5B, with a ~$300M Bloom Energy position now worth ~$1B, a big SanDisk bet, and — according to Santi, uncertainly described as his wife or girlfriend — a partner who is chief of staff to Dario at Anthropic.
• The stat of the week: FTX’s 7.8% Anthropic stake, at this week’s $800B raise, “would now be worth more than all of Coinbase” — and was liquidated by the trustee at roughly $1.5B. Creditors were still made whole “and then some.”

3. The Hyperliquid thesis: weekend oil crossed the chasm

• Jason’s framing off the Colossus profile of founder Jeff: Jeff “has now captured the imagination and the interest of Wall Street,” and like Polymarket during the contested election, a geopolitical catalyst — weekend oil trading around the Iran war or attack — was the lightning in a bottle. His conviction: “the train has left the station” and activity doesn’t stop even if the Strait of Hormuz situation resolves.
• The data: commodities are now Hyperliquid’s second-biggest asset — open interest splits at Bitcoin 25%, commodities 17%, Ethereum 16%, HYPE 10%, leveraged indices 7%, L1s and equities 4% each, Solana 3.5%; oil alone is doing ~$500M volume and $350M OI. The episode’s Weekend Markets site describes TradeXYZ as “the only live venue for price discovery” when TradFi closes, with billions in weekend volume and a 50bps median error predicting the Monday open — making its prices “the most informative signal in finance” versus the Friday close.
• Santi’s accountable predictions: commodities flip Bitcoin on the platform later this year, and HYPE — sitting at $25B — has “a clean path to $100 billion” as a top-five crypto asset, comparable to Robinhood and Coinbase. The valuation question is whether memecoin-driven earnings and commodities/TradFi trading should receive the same multiple. Solana peaked near $100B amid substantial memecoin activity and reached a point of ~$500M in revenue; “that’s why you see a path where Hyperliquid could be much larger.”
• Sentiment corroboration from DAS panel scraping: Bitcoin mentioned 742 times, Ethereum 143, Hyperliquid third at 66, then Morpho at 59, Solana, Canton, and a surprise Espresso at #7.

4. Wall Street’s most interest since Paul Tudor Jones — and the DAT as access wrapper

• Jason’s marker: “This is the most interested I’ve seen traditional, specifically hedge fund managers in crypto since Paul Tudor Jones called Bitcoin the fastest horse in the race. And that was May 2020.” The interest is specifically in Hyperliquid, and weekend markets are a big reason.
• The anecdote that carries it: a massive fund manager called Jason to have Hyperliquid explained — he and his team get most trade ideas from Twitter, he went down the rabbit hole via one trader’s post and Jeff’s podcasts, couldn’t buy HYPE in the fund, so bought the Hyperliquid DAT. It’s now one of their biggest positions: “one of the few uncorrelated things I can buy right now… uncorrelated to all these AI trades.”
• Is there a hedge-fund bear case? Not yet, per Jason: “They’re just learning about Hyperliquid. I don’t think they even have necessarily a bull or bear case.”
• The rerating option: with Jake Chervinsky hired to run what Jason tentatively calls the Hyperliquid Policy Institute, Jason’s suggested pitch to the CFTC — heavily hedged as “way out of my depth” — is that, in his understanding, Dodd-Frank routed futures through regulated entities such as CME or Cboe for transparency, while DeFi offers public visibility into every trade. He acknowledges that “things blow up,” but says Hyperliquid’s liquidations worked reasonably well through the 10/10 stress test. “Imagine HYPE gets approved in the US — boom, instant rerating.” Santi puts the approval probability at 30–40%; the CME comp is a $117B market cap.

5. Tether backs Drift recovery, the SEC clarifies DeFi front ends, CLARITY odds reprice

• Drift’s $285M hack gets a structured recovery of nearly $150M, $127M from Tether — users recover their losses by trading on Drift, effectively in USDT. Santi’s read: “quite clever actually… kind of the only way to do it” short of a massively dilutive event. Both hosts note the timeline’s view that this is a big win for Tether and a loss for Circle, whose USDC allegedly did not freeze funds quickly during the incident.
• The SEC’s Division of Trading and Markets said certain self-custodial crypto interfaces fall outside broker-dealer registration via a new “covered user interface” category — addressing what Jason describes as one of DeFi’s biggest legal questions: whether a front end makes you a broker. MetaMask, Phantom, and DEX interfaces avoid Series 7s and compliance departments; custodial wallets are excluded. Jason is surprised DeFi tokens didn’t rerate on it.
• Jason’s explanation for the broader crypto rerate: CLARITY Act odds moved from a dead-split 50/50 in DC last week to ~60/40 or 65/35, and the CNBC-incepted “dead if it doesn’t pass by April 1” claim was wrong. Santi says there may be runway to August, perhaps even 2027, though “the longer you wait, the more stuff gets pushed into it… this becomes the DEI bill.”
• MicroStrategy funded a close-to-14,000-BTC purchase with proceeds from an ATM offering tied to STRC, its perpetual preferred paying an 11.5% annual dividend. Holdings are now described as 780,000 BTC, with close to $60B spent and a $75K average cost basis. Santi flags Saturn, a protocol wrapping STRC on-chain at roughly 11.5% yield, but explicitly punts on risk: “I need to get smarter on it, to be honest.” Both want a segment on “where’s the yield coming from?”

6. Kraken at $13.3B, with the IPO window hostage to SpaceX

• Deutsche Börse’s $200M bought a 1.5% stake at $13.3B, down from $20B in late 2025 — Jason’s guess is a roughly 35% discount because it was secondary common rather than preferred, “but I’m not entirely sure.”
• Jason is unsure whether Kraken lists this year; Santi says the timing depends on SpaceX: “the SpaceX IPO will either be a huge detonator, good or bad, for the market… the line in the sand.” If SpaceX gets a massive bid and wealth effect, “the gates will be open” and IPOs could go back-to-back.
• Santi’s exchange-underwriting framework, applied honestly: through-cycle you want operating leverage and flexible costs because revenue is tied to crypto prices — his older analysis ranked Robinhood #1, Coinbase #2, Kraken #3, which kept him on the fence. But that was pre-Arjun, and now: “Kraken is a very well-run machine… this can grow into a Coinbase type of outcome. I might look in secondary.” He says he is going to invest in Backpack and calls Armani Ferrante a very good builder.
• Adjacent bets: xStocks’ pre-IPO activity, including Anthropic and others, is still small at roughly $17M, but Kraken and other exchanges are betting on-chain equities “will have a massive, massive year.” Meanwhile X announced Cashtags in the U.S. and Canada on iPhone, with inline price charts — “this is trying to complete Elon’s vision” of the all-in-one financial platform.

7. L2s as melting ice cubes; this cycle, protocols actually die

• The Scroll–EtherFi mess, with Jason’s investment in Scroll disclosed: as EtherFi migrated 70,000 cards to Optimism, Scroll raised its data-publishing charges “by a factor of a thousand” over six days in early April, forcing over $50K in excess fees — “the timing was suspicious… the on-chain data is definitely pretty damning.” Jason’s non-answer on what went wrong: “I don’t know, man, to be honest.” Scroll now sits at an $8M market cap and $45M FDV — below its first round. “Tell me an L2 that has performed well” — echoing Jason’s reference to Vitalik’s post questioning the L2 roadmap.
• The structural read: crypto’s white-paper era of market patience is over, the “growing divide of the haves and the have-nots” is now a chasm between Hyperliquid and everything else, and infrastructure is “a melting ice cube whether you want to see it or not.” Santi’s categorical call: “now you’re going to see protocols go to zero. Like genuinely go to zero” — the dust-becomes-moon dynamic won’t repeat. Solana revenue is down from a ~$500M peak to $20M, though Santi credits real work under the hood, including Western Union’s pilot and competent engineering — teams “have to go for the jugular.”
• Santi’s three investable theses, verbatim in spirit: ex-US stablecoin demand “is and will continue to be dramatic and it’s unmet,” the world “is only going to become more volatile,” and there’s “a big affordability crisis” — “those three pillars have on-chain implications. Position yourself accordingly.”
• The rotation heuristic to close: last year’s three hot things were perps, prediction markets, and stablecoins — do one and you got funding and users; do anything else and you got crushed. Jason’s guess for this year’s three includes tokenization/equities on-chain. Jamie Dimon is “closer to Larry Fink than he’s ever been,” and Dimon said they were considering prediction-market services. The Allbirds AI pivot (stock up ~10x) gets the top-signal verdict: “we are closer to the top than we are to the bottom when these things happen.”