Prediction markets and permissionless perps on Hyperliquid: Exploring HIP-3 and HIP-4
Watch on YouTube ↗  |  February 03, 2026 at 05:25 UTC  |  57:05  |  The Block
Speakers
Jake Ostroskis — Head of OTC Trading at Wintermute
Adam McCarthy — Senior Research Analyst at Kaiko

Summary

  • The crypto market is currently experiencing a "bear market" in sentiment and realized volatility, despite price levels not being at cycle lows. Retail capital has largely migrated to high-volatility assets like physical metals (Gold/Silver) and AI stocks.
  • Hyperliquid is emerging as a dominant "everything exchange," aggressively expanding into Permissionless Perps (HIP-3) and Prediction Markets (HIP-4), challenging incumbents like PolyMarket and traditional offshore exchanges.
  • Bitcoin's correlation has decoupled from "Digital Gold" and is strictly trading as a "Momentum/Tech Beta" asset. A reversal in the AI/Tech equity trade is cited as the primary downside risk for crypto.
Trade Ideas
Ticker Direction Speaker Thesis Time
BTC /CRYPTO HIGH BETA
WATCH Jake Ostroskis
Head of OTC Trading at Wintermute 		Bitcoin is currently trading strictly on the "Momentum Factor." It is not trading as a debasement hedge (Gold) or a risk-off asset. Since BTC is effectively a high-beta proxy for the Nasdaq, the primary risk is a rotation out of Tech/AI stocks (e.g., if Microsoft or NVIDIA roll over). If the "juice comes out of the AI trade," crypto will suffer a correlated drawdown regardless of its own fundamentals. WATCH Nasdaq and AI equities. If Tech momentum breaks, SHORT/AVOID Crypto. A sudden geopolitical shock could briefly flip BTC back to a "digital gold" correlation, invalidating the tech-beta thesis. 2:58
SILVER /GOLD
LONG Tim Copeland
Co-host, Head of Growth at The Block 		Crypto realized volatility is dead. Retail traders are "touristing" into physical metals because that is where the standard deviation moves are happening. Capital in this cycle is mercenary and chases volatility, not ideology. If Crypto remains flat/boring, liquidity will continue to drain from Crypto into Commodities (Metals) to chase the momentum there. LONG Metals (as a volatility play). The "generational rally" in metals may have already peaked (crowded trade). 20:05
HYPE
LONG Jake Ostroskis
Head of OTC Trading at Wintermute 		Hyperliquid is launching HIP-3 (Permissionless Perps for RWAs like Silver/Stocks) and HIP-4 (Prediction Markets). The chain is generating significant volume and fees, yet is considered "undervalued" relative to peers. In a market starved of organic yield, protocols with "genuine revenue" and "buyback mechanisms" become the only defensible investments for institutional committees. Hyperliquid's speed of execution (bypassing slow DAO governance) allows it to capture market share from slower incumbents like PolyMarket or Coinbase. LONG the ecosystem/token. It is the "only exciting thing" in the current market structure. Regulatory crackdown on permissionless derivatives; technical failure in oracle pricing for RWAs during off-market hours. 19:48
MSTR
LONG Jake Ostroskis
Head of OTC Trading at Wintermute 		MicroStrategy (MSTR) has a massive USD balance sheet and can service its debt. Conversely, smaller "Digital Asset Treasury" companies are sitting on unrealized losses and are trading below their average purchase price. The "Treasury" model relies on reflexivity: stock price goes up -> raise cash -> buy coin -> coin goes up. On the way down, this breaks. Smaller players may be forced into a "death spiral" where they must sell assets to survive, crushing their stock. MSTR is capitalized enough to survive; the others are not. LONG MSTR (Flight to quality/liquidity), AVOID small-cap crypto treasury stocks. Bitcoin price drops by 50%, putting even MSTR under pressure. —