From Casino Tools to Global Pricing Machines: The NYSE Leader's Perspective on Hyperliquid

Author: Zhou, ChainCatcher

Recently, Jeffrey Sprecher, founder and CEO of Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, attended the Bernstein investor conference.

When the host asked about the competitive threat posed by Hyperliquid, Sprecher revealed that he had personally met with the Hyperliquid team multiple times to discuss the overlap in their businesses and potential collaboration opportunities. He described the other team as extremely smart and characterized their communication as "mutual admiration."

At the same time, he posed a sharp question to regulators. If on-chain perpetual contracts are illegal, why has Hyperliquid not received a regulatory letter? If they are legal, why are traditional exchanges not allowed to participate? Why should they be prohibited from doing what is already happening globally?

These remarks carry significant weight. The leader of the world's largest traditional exchange questions the double standards of regulators in front of investors by pointing to the legal existence of a competitor.

ICE's Pathway Strategy

Earlier this month, Bloomberg reported that ICE, in collaboration with the Chicago Mercantile Exchange (CME), pressured the Commodity Futures Trading Commission (CFTC) to investigate Hyperliquid. This was widely interpreted as traditional giants joining forces to besiege new forces.

Sprecher explicitly denied this narrative at the conference. He stated, ICE is not feeling panic, but is continuously communicating and learning from the Hyperliquid team. "We are helping them understand our world, and they are helping us understand theirs. In this sense, it is a mutual admiration."

The core of those dialogues with regulators has always been about whether ICE itself can enter this market, rather than blocking the other party. He bluntly stated, "If you think this is illegal, why haven't they received the same regulatory letters as us?"

When these two threads are viewed side by side, Sprecher's strategic context becomes clear. Whether it is private meetings to gauge the other party's cards or seeking entry qualifications from regulators, it is the same pathway logic, just different levels of execution.

In fact, ICE's layout has already been accelerating. In March of this year, ICE invested in OKX at a valuation of $25 billion, securing a board seat; in the same month, it completed a $600 million cash investment in the prediction market platform Polymarket. Last week, ICE and OKX jointly launched perpetual futures contracts based on Brent crude oil and WTI crude oil, directly entering the market already dominated by Hyperliquid.

As for the potential forms of collaboration with Hyperliquid in the future, Sprecher did not disclose details, only mentioning that both parties are exploring areas of business overlap. However, from ICE's recent layout, the direction is relatively clear. The cooperation model between ICE and OKX involves ICE providing benchmark pricing while the crypto platform is responsible for execution. This division of labor also applies to Hyperliquid—ICE holds the pricing power of the world's most important commodities and financial assets, while Hyperliquid has a 24/7 operational on-chain infrastructure, making the complementary space between the two easy to imagine.

Sprecher also specifically mentioned the upcoming IPO of SpaceX. Based on the platform TradeXYZ built by Hyperliquid, a SpaceX pre-IPO perpetual contract has been launched. This contract does not require holding any SpaceX stock and has not been authorized by the company, with an initial reference price of $150, corresponding to an implied valuation of about $1.78 trillion, which briefly surged to $216 in the short term.

Sprecher stated that once SpaceX officially goes public on June 11, everyone will see the gap between on-chain pricing and the final IPO price. In his view, this will be a key moment to test the on-chain price discovery capability, at which point both regulators and market participants will be forced to state whether this price is meaningless or extremely important.

The Identity Transformation of Perpetual Contracts

ICE's sense of urgency at this moment does not stem from the size of Hyperliquid itself, but from the fundamental identity transformation that perpetual contracts are undergoing as a tool.

Crypto researcher @Pxstar_ referred to it as the third moral liberation of the industry.

After being invented by BitMEX, perpetual contracts were viewed for a long time as the worst gambling tool in the crypto space. Exchanges profited handsomely from them, but the average survival cycle of ordinary users was less than three months, with most losing their assets within 100 days. Their liquidity did not feed back into the spot market but rather eroded it.

The turning point came when Hyperliquid extended the underlying assets of perpetual contracts to traditional assets such as crude oil and pre-IPO stocks through HIP-3. The tool itself did not change, but it began to serve real price discovery needs.

From early this year to the end of March, the situation in the Middle East remained tense, with many geopolitical decisions occurring over the weekends. The traditional oil futures market was closed at this time, while Hyperliquid's crude oil perpetual contracts filled this gap.

Data shows that the cumulative trading volume surged from $339 million to $7.3 billion within weeks, increasing more than 20 times; the open interest also expanded from less than $200 million to over $1.26 billion.

Sprecher pointed out, it was precisely because many decisions during the Middle East conflict occurred over the weekends that this platform gained such high visibility.

When a derivative that was once seen as a gambling tool begins to undertake price discovery functions in the world's most important commodity market, its nature has already changed.

This is also why Sprecher remarked that this platform, built by an 11-person team with an estimated gross margin of up to 99%, has created a wealth volume that rivals Nasdaq.

Delphi Digital also stated that perpetual contract exchanges will become the core hub of the digital value era, just as Wall Street was the core hub of the industrial era. And Hyperliquid is currently the one that has gone the farthest.

The Real Dilemma of Traditional Exchanges

In the face of Hyperliquid's expansion, ICE attempted to start with trading hours. Sprecher revealed that ICE communicated with several oil companies, proposing to remain open on weekends to follow global trading time zones.

The market response was tepid, but this result was not unexpected.

Hyperliquid's advantage does not lie in the extension of trading hours but in the efficiency of the entire infrastructure. An on-chain order book, stablecoin settlement, fully transparent on-chain records, 24/7 operation, combined with extremely low marginal costs—this is a structural gap that traditional exchanges cannot replicate by merely adjusting operating hours.

More importantly, the situation of institutional clients is worth noting. Sprecher mentioned that most of ICE's institutional clients are currently not trading on-chain, as internal compliance restrictions prevent them from participating at the institutional level. However, at the same time, these institutions are closely watching, especially focusing on Hyperliquid's price discovery dynamics. Before the traditional market opens, an increasing number of traders have begun to reference on-chain price trends.

This means that ICE's institutional clients are in an awkward position: unable to directly participate in on-chain trading while also unable to ignore the impact of on-chain prices on the traditional market.

The regulatory aspect is also filled with uncertainty. The CFTC currently faces a fundamental question: what exactly do on-chain perpetual contracts belong to? Are they innovative products that require a completely new legislative framework, or can they be classified as swap contracts under the existing Dodd-Frank Wall Street Reform and Consumer Protection Act? Sprecher candidly admitted that he is not sure if regulators themselves have an answer.

Meanwhile, both sides are vying for the initiative in rule-making. Recently, Hyperliquid co-founder Jeff Yan met with policymakers in Washington to discuss pathways for incorporating the on-chain derivatives market into the U.S. regulatory framework. Hyperliquid's policy center emphasized that the on-chain trading records are more transparent than any traditional exchange.

Conclusion

Sprecher mentioned that if he were a bit younger, he would also want to participate in the Hyperliquid venture. This statement not only acknowledges innovation but also reflects the complex mindset of traditional finance towards new trends.

Traditional exchanges are gradually approaching this market through investment, collaboration, and regulatory lobbying. Hyperliquid, on the other hand, continues to expand its legitimacy space with transparency and efficiency as its bargaining chips.

ICE understands this business, and the next step is no longer about whether to enter the market, but how to enter it.