Artemis In-Depth Research Report: Anchored to Hyperliquid, $PURR is the only truly profitable underlying crypto treasury stock

Author: Zheng Jie

Translation: Shenchao TechFlow

Shenchao Guide: Artemis is a leading data analysis institution in the crypto industry. This research report comes from its analyst Zheng Jie. Strategy (formerly MSTR)‘s mNAV has fallen from 6 times to 1.15 times, the DAT track has been collectively disenchanted, but the author believes PURR should not be treated equally: Strategy spends $3.04B daily to service debt, BMNR and Forward Industries’ ETH and SOL are already trapped, while PURR’s HYPE comes from a real profitable machine with 11 people, $857 million in annual revenue, and 99% of income used for buybacks and burns.

Conclusion

The market is pricing PURR using the framework of another MSTR: issuing shares at a premium, buying more tokens, increasing the number of tokens per share. We believe this valuation is wrong. Strategy spends $2.3 million daily to pay interest on 780,897 BTC, $835 million annually on preferred stock and convertible bonds, while Bitcoin itself generates no income; its mNAV has already fallen from over 6x to today’s 1.15x. PURR has no debt, no preferred stock, no recurring expenses. Its 18.8 million HYPE tokens are backed by the only mainstream protocol expected to be profitable in 2025: $857 million in fee income (of which $797 million from perpetual contracts, fee rate 2.72 basis points), 99% flowing into the Assistance Fund, $837 million used for buybacks and burns, with almost zero operating costs. Token structure is deflationary: about 19 million tokens are repurchased and burned annually, with about 7 million tokens released from staking reserves. The current stock price is 1.12 times mNAV. Our baseline assumption is HYPE reaching $76 by 2030, corresponding to an expected profit of $1.71 billion and a PE ratio of 20, with PURR maintaining 1.1x mNAV, implying a share price of $10.59 and about 63% upside over five years. In an optimistic scenario, HYPE reaches $127, 1.3x mNAV, corresponding to $20.84, +220%. In a pessimistic scenario, HYPE drops to $27, 16 PE, 0.95x mNAV, corresponding to -49%.

Comparison: PURR’s Unique Position in the Crypto Treasury Track

Caption: Among all crypto treasury (DAT) companies, only PURR simultaneously meets three conditions: underlying assets generate cash flow, book profits, and have zero debt.

What is PURR?

Hyperliquid Strategies Inc (Nasdaq code: PURR) is a crypto treasury (Digital Asset Treasury, DAT) company with the sole mission of accumulating and holding HYPE, the native token of Hyperliquid protocol. The company was established in December 2025, formed through a merger of Sonnet BioTherapeutics, Paradigm’s SPAC firm Rorschach I LLC, and Atlas Merchant Capital’s newly created entity, with $888 million.

Its balance sheet is the cleanest in the entire DAT track: 18.8 million HYPE, $112.6 million cash, zero debt, zero preferred stock, zero convertible bonds. In January 2026, the company authorized a $30 million share buyback plan. As of February 3, 2026, $10.5 million had been used to repurchase about 3 million shares, reducing total diluted shares to 150.8 million. There is also a $1 billion equity line available outside cash reserves, as backup ammunition for HYPE price corrections.

What makes this structure unique is the underlying asset. HYPE is equivalent to Hyperliquid’s equity certificate, which is a perpetual contract exchange that generated $857 million in fees in 2025, staffed by only 11 employees (average annual revenue per person about $78 million, the highest among all companies globally).

Caption: Hyperliquid protocol fundamentals: $857 million in fees in 2025, 99% flowing into the Assistance Fund for buybacks and burns.

Fee Machine

Hyperliquid is an exchange.

Its model is “trading volume × fee rate,” with marginal costs close to zero.

Fee distribution is divided into six components:

Caption: Hyperliquid fee distribution waterfall: spot/perpetual fees, HLP sharing, assistance fund buybacks, staking releases, etc.

Point 1: The only profitable underlying asset

Today, all listed DAT companies in the US package assets that either generate no income (BTC) or, once accounting for token issuance to maintain on-chain operation, are actually losing money. Ethereum generated $526 million in fees in 2025 but paid out $3.94B in staking issuance; Solana generated $680 million but paid out $500k. Hyperliquid generated $857 million in fees.

The definition of “profit” here needs clarification. For Hyperliquid, profit = fees after deducting 1% HLP treasury share (before August 30, 2025, it was 3%), with 99% flowing into the assistance fund for buybacks and burns: $857 million in fees corresponds to $837 million in profit. For Ethereum and Solana, comparable figures are fees minus staking issuance, since these chains cannot operate without token issuance—validators must pay with tokens. This is the real operational cost; both chains showed negative net income at the time of writing. Hyperliquid’s $312 million staking issuance comes from pre-allocated reserves, not from exchange revenue, so it’s excluded from this calculation. Adjusted for this (totaling $545 million), Hyperliquid is the only protocol with positive cash flow.

This gap is directly reflected in the balance sheets of DAT companies. BMNR’s average ETH purchase cost is $2,826, Forward Industries’ SOL purchase cost is $232. Both are currently trapped.

Caption: Comparison of unrealized gains/losses among crypto treasury companies: only PURR’s HYPE holdings have substantial unrealized gains, about $600 million.

PURR is the only DAT with substantial unrealized gains; its HYPE holdings have earned about $600 million. The underlying assets not only generate income but are also appreciating.

Five growth factors are stacking this advantage:

HIP-3: Turning Hyperliquid into a listing platform. Launched in October 2025, developers can stake 500k HYPE to deploy permissionless perpetual contracts on any asset: commodities, stocks (China, Korea, Japan), forex, alternative assets. This transforms HL from a crypto exchange into a universal listing layer. During the Hormuz Strait crisis, a crude oil market deployed via HIP-3 handled $305 million in nominal volume over a weekend; cross-asset weekend prices correlated with traditional market reopen prices with R² = 0.785 (measured by Shaunda at Blockworks). The TAM of tokens that can be listed expands from $30-50 trillion in crypto derivatives to over $100 trillion in global derivatives markets. Each HIP-3 deployment requires a permanent stake of 500k HYPE; HIP-4 does the same. Scaling to 20 markets would lock in about 10 million HYPE (2.1% of circulating supply).

DAT as a developer partner. At current prices, 500k HYPE is about $2.3 million. Most development teams cannot afford this upfront. PURR’s large holdings (18.8 million HYPE) are natural counterparties: providing funding or co-deployments for HIP-3/HIP-4 in exchange for a share of market fees. This creates an income stream and ecosystem influence that individual HYPE holders cannot replicate.

HIP-4: Options and event contracts. Testnet launches March 2026, mainnet targeted for Q4 2026. Deribit, acquired by Coinbase, had over $1.875 trillion in options nominal trading volume in 2025, accounting for over 85% of the market (~$2.2 trillion). Options currently account for only 3% of crypto derivatives (total crypto derivatives volume is $85.7 trillion per Coinglass). If on-chain options reach 15% penetration, HL capturing half would mean $165 billion in trading volume × roughly 8 basis points (wider than perpetual contracts, Deribit charges 12 bps) = $50k in annual fees. The baseline model starts at $50 million in 2026, rising to $130 million by 2030. Market event contracts open a second revenue line for HIP-4 (Polymarket’s annualized fees are nearly $700 million).

Caption: Deribit options market data: 2025 annual options nominal volume exceeded $1.875 trillion (Source: Deribit).

Builder Codes: Cost-free customer acquisition channels. Currently, about 40% of HL daily active users access via third-party frontends (Phantom being the largest). Each transaction routed through third-party frontends earns developers a share, totaling over $40 million paid (data from Dwellir). Compared to Coinbase’s $400–$600 customer acquisition cost per account, HL’s is negative. This explains why perpetual trading volume is projected to grow from $2.9 trillion in 2025 to $5.2 trillion in the baseline scenario by 2030. Distribution is outsourced.

USDH: Native stablecoin with fee sharing. Native Markets obtained USDH issuance rights in September 2025. Reserves are managed in a BlackRock fund, with 50% of reserve income flowing into the assistance fund.

At current supply (~$93 million) and a 3.7% US Treasury yield, USDH contributes about $1 million annually to the assistance fund for buybacks. When supply reaches $2–$5 billion, annual contributions could be $40–$100 million. The HIP-4 options may only support USDH trading, providing a huge tailwind for Native Markets’ stablecoins.

Caption: Comparison of stablecoin supply sizes (Source: Artemis Stablecoin Dashboard).

All these expansions do not require Hyperliquid to hire. Each growth line (HIP-3 listing, HIP-4 options, builder distribution, USDH floating supply) is outsourced to external teams, who bear listing and distribution risks in exchange for fee sharing. The core team of 11 focuses solely on protocol development and fee pipelines. This is a platform scaling model: throughput, listing targets, and front-end infrastructure grow without increasing headcount.

Point 2: Buying this shell at cost

Strategy’s play is issuing shares at a premium, converting cash into BTC, then calling it financial engineering. The problem is, once the premium disappears, the mechanism reverses—this is where the entire DAT track currently stands (Strategy fell from 6x to 1.15x). PURR’s approach is opposite: its share price hovers around 1.12x NAV, with a $30 million buyback plan only triggered when market prices are below its net asset value. Every dollar spent on buybacks below NAV mechanically increases the number of HYPE tokens per share. This mechanism works both ways. Below NAV, management repurchases shares, making each remaining share represent more HYPE. Above NAV, they can issue new shares at a premium to raise funds to buy more HYPE, increasing tokens per share again. Both directions are adding value to existing shareholders.

Other DAT companies lack this mechanism. Strategy, BMNR, Forward Industries all issue shares to buy tokens, but when premiums compress, they do no buybacks. Shareholders are diluted when prices rise, and get nothing when prices fall.

Directly buying HYPE also has advantages: no management fees at the company level, no dilution risk from equity financing lines, no regulatory risks targeting PURR, and 100% exposure to token upside. Staking and airdrops are only available to direct holders.

But PURR offers four things that direct HYPE holders cannot access:

Automatic appreciation without additional risk: the buybacks are paid from existing cash on the balance sheet, with no margin calls, no liquidation risk, and no operational actions needed by holders. Direct holders can leverage via perpetual contracts or loans, but that introduces counterparty and liquidation risks.

Regulatory moat: PURR and HYPD are currently the only Nasdaq-listed HYPE exposure tools. Any enforcement actions against Hyperliquid’s KYC-free operations would push institutional demand into this shell.

Zero obligations: no debt, no forced sales, no preferred stock.

Tax efficiency: PURR is taxed as a regular stock. Holders over one year pay long-term capital gains (up to 20% federal), can be placed into IRAs and 401(k)s for tax-deferred or tax-free growth, and can harvest tax losses against other stock positions. Direct HYPE holders pay ordinary income tax on staking rewards (up to 37%), with no tax advantages for retirement accounts, and IRS guidance on airdrop cost basis remains unsettled. For high-tax investors in the US, this shell roughly halves the tax burden.

The underlying exchange generates $1.76 in revenue per “circulating HYPE” (calculated as $837 million ÷ 477 million circulating supply). This metric was introduced by Artemis in August 2025 together with Pantera Capital.

Valuation & Scenarios

Valuation proceeds in two steps: first, value HYPE based on fundamentals (expected 2030 earnings × PE ÷ circulating supply), then convert HYPE price into PURR’s NAV per share based on target mNAV.

HYPE valuation scenarios

HYPE is valued based on (fees × 99% after deducting HLP share) × terminal PE:

Caption: HYPE 2030 valuation three scenarios: baseline $76 (20 PE), optimistic $127, pessimistic $27 (16 PE).

PURR valuation scenarios

The formula translating HYPE scenarios into PURR’s is: Adjusted per-share NAV = (18.8 million HYPE × price + $112.6 million cash − $95.8 million deferred tax + $4.5 million adjustment) ÷ 150.8 million fully diluted shares, then multiplied by the target fully diluted mNAV. Historically, DAT stocks with productive underlying assets have their NAV multiples reprice to 1.1–2.0x during upcycles; the normal track is 1.0x.

Caption: PURR 2030 valuation three scenarios: baseline $10.59 (+63%), optimistic $20.84 (+220%), pessimistic $3.32 (−49%).

Baseline scenario: HYPE reaches $76 in 2030, adjusted NAV per share is $9.63, valued at 1.1x NAV, corresponding to a share price of $10.59, +63% over five years.

Optimistic scenario: HYPE reaches $127, adjusted NAV is $16.03, revalued at 1.3x, corresponding to $20.84, +220%.

Pessimistic scenario: HYPE drops to $27, adjusted NAV falls to $3.49, mNAV drops to 0.95x, corresponding to $3.32, −49%. The baseline scenario’s annualized return is about 10%, but the distribution is asymmetric: in the downside, the protocol’s zero debt and ongoing fee generation of $782 million provide a buffer; in the upside, both HYPE appreciation and mNAV revaluation benefit.

Management & Ownership Structure

PURR is a balance sheet company. Its sole job is capital allocation: when to buy HYPE, when to buy back shares, when to use equity lines, or do nothing. The decision-making team has over 80 years of combined experience in capital markets, bank balance sheet management, and exchange infrastructure. Paradigm is a cornerstone investor, the largest crypto-native fund globally (assets under management $12.7 billion). D1, Galaxy, and Pantera are also shareholders, connecting traditional finance with crypto. Bob Diamond’s network also serves as a distribution channel, catering to asset allocators who want HYPE exposure but cannot custody tokens or handle crypto tax complexities.

Bob Diamond (Chairman): Former CEO of Barclays, co-founder of Atlas Merchant Capital

David Schamis (CEO): Co-founder of Atlas Merchant Capital, former JC Flowers partner

Eric Rosengren (Director): Former President of Boston Fed (2007–2021)

Larry Leibowitz (Director): Former COO of NYSE, operating partner at Atlas Merchant Capital

Key investors include Paradigm, D1, Galaxy, Pantera.

Risk Factors

1. HYPE price decline

PURR is a leveraged position on HYPE’s price. A crypto bear market would compress trading volume, fees, and buyback pools. The pessimistic scenario models: TAM stagnates at $85 trillion, HL market share remains at 3%, fee rate drops to 2.3 bps, PE ratio falls to 16, resulting in HYPE at $27 and PURR at $3.32 (−49%). Circulating supply about 477 million; the pessimistic scenario assumes team token vesting at 35% in 2026–2027.

Mitigation: Zero debt means no forced selling. Even in the worst case, Hyperliquid can still generate $782 million in fees and $774 million in profit, with buybacks continuing to outpace staking issuance, keeping tokens deflationary (net annual burn about 23 million). The $1 billion equity line is optional, not mandatory.

2. Regulatory enforcement against Hyperliquid

Hyperliquid operates without KYC. The Futures Industry Association has formally complained to US regulators, demanding enforcement against offshore perpetual contracts accessible to US residents. Any adverse enforcement would directly suppress HYPE. Extending HIP-3 to traditional assets (silver, oil, stocks) increases regulatory exposure; commodity perpetuals might attract CFTC scrutiny, beyond current crypto-specific enforcement scope.

Mitigation: PURR itself is a fully compliant Nasdaq-listed entity. Regulatory enforcement is more likely to push US institutional demand into this shell, which is a recognized way to hold HYPE economic rights.

3. Dilution from equity financing lines

The $1 billion equity line can be activated if HYPE declines, but issuing shares at the wrong price dilutes existing shareholders. In the pessimistic scenario, with HYPE at $27, PURR’s adjusted NAV per share is $3.49, so issuing new shares at below $6.51 would be dilutive.

Mitigation: The line is optional, entirely at management’s discretion. Currently, the stance is to buy back rather than issue new shares. As of early February 2026, $10.5 million of the $30 million buyback plan has been executed, repurchasing about 3 million shares, reducing total diluted shares to 150.8 million. Paradigm-led shareholder structure has no motivation to dilute itself.

4. DAT premium compression

Any premium over NAV that appears during a rally can quickly compress if sentiment reverses. Strategy’s 6x mNAV premium fell to 1.15x in less than 12 months. In the optimistic scenario, PURR revalues to 1.3x NAV ($20.84); if sentiment reverses and the multiple reverts to 1.1x, the maximum loss is the difference in mNAV.

Mitigation: PURR’s current mNAV is 1.12x. Compared to Strategy’s peak premium of over $5 per dollar of NAV, PURR’s premium is about 12 cents. The asymmetry favors the upside: 1.3x in a bull cycle is a moderate valuation, whereas historically, productive DAT stocks have traded above 2.0x. When at 1.0–1.1x, this shell’s value is essentially the underlying assets themselves.

Disclaimer: This article is for informational purposes only and does not constitute investment, financial, trading advice, or any form of recommendation. The opinions expressed are solely those of the author and should not be taken as buy/sell/hold recommendations. The author or related entities may hold positions in assets discussed herein. You should conduct your own research and consult with a qualified financial professional before making any investment decisions.