Markets are becoming increasingly split. Equities continued grinding higher last week, while BTC lagged and crypto ETF outflows persisted. But under the surface, one part of the crypto market continues to stand out: perps. Hyperliquid-led markets remain one of the strongest areas in the space, supported by growing RWA volume, stronger mindshare among TradFi users, and now a fresh regulatory signal from the CFTC. This week, we look at the divergence between traditional markets and crypto, why perp-related assets keep outperforming, and what Kalshi’s newly approved BTCPERP actually changes for US market structure.

Last week saw a sharp divergence between traditional markets and crypto. The Nasdaq and S&P 500 continued their march higher, posting gains of 2.0% and 1.5%, respectively. Gold also finished the week in positive territory, up 0.76%. BTC, however, continued to struggle and ended the week down -3.8%.

The S&P 500 has now notched nine consecutive weeks of gains and is up 20% since the start of the US-Iran conflict. Continued strong earnings reports have kept investor enthusiasm around the AI trade firmly intact, pushing tech-heavy indices to fresh all-time highs. Despite lingering concerns around inflation stemming from the conflict, markets appear increasingly willing to look through near-term risks as hopes for a potential peace agreement continue to build.

Meanwhile, crypto ETFs have now recorded three consecutive weeks of outflows. BTC ETFs saw another -$1.3B of outflows last week, while ETH ETFs lost -$235M. Bitcoin DATs purchased roughly $2B worth of BTC in May, with Saylor remaining one of the largest sources of marginal demand. However, any slowdown in these purchases alongside continued ETF outflows could help explain BTC's recent underperformance relative to both equities and gold.

Despite BTC's weakness, select areas of the market continue to show impressive strength and an increasingly decoupled performance from the broader crypto landscape. Perps remained the best performing sector, gaining 16.3% on the week. HYPE once again led the way with gains of 16.3%, while LIT and ASTER followed closely with returns of 12% and 11%, respectively.

The strength in the Perps sector continues to be driven by Hyperliquid's expansion into TradFi markets. RWA-related volume, primarily from HIP 3 markets, now accounts for 32% of total volume on the exchange and has become the main driver of growth as crypto-native trading activity remains relatively flat. These markets have also helped their mindshare grow among a TradFi audience. 

Outside of Perps, names such as CARDS, ZEC and VVV continue to show resilience, with pullbacks remaining shallow and short-lived. The divergence within crypto is becoming increasingly apparent, with capital concentrating into a handful of high-conviction narratives while much of the market continues to bleed.

Looking ahead, Friday's Nonfarm Payrolls report will be the key macro event to watch, with unemployment expected to hold steady at 4.3%. For crypto markets, however, the bigger question remains whether ETF flows and DAT flows can help BTC find a near-term price floor and provide a base for the broader market to rally. 

— Kunal

Regulated Perps

On May 29, the CFTC said it had permitted a CFTC-registered exchange to list a true bitcoin perpetual, creating a regulated US pathway for a structure that has historically traded mostly offshore.

Until now, US venues couldn't simply copy the offshore model, where contracts have no expiry and funding rates keep them anchored to spot. Historically, that leveraged exposure had to fit inside the CFTC's futures framework: the product generally needs to list on a CFTC-regulated designated contract market (DCM) and comply with rules covering market integrity, surveillance, clearing, margin, and contract design.

So while it may have looked like perps already existed in the US, those products were mostly workarounds built to fit the existing system. Coinbase's nano Bitcoin Perp-Style Futures, for instance, replicated some of the offshore economics but still carried a five-year expiry and was structured as a regulated, cash-settled futures contract.

Offering these also wasn't as simple as defining an oracle mark price and perpetual logic. Venues had to build or buy the full US derivatives stack: a CFTC-regulated exchange to list the contract, an approvable product structure, a clearinghouse for margin and settlement, and approved futures intermediaries to connect users. That's why Coinbase acquired FairX, now Coinbase Derivatives, rather than listing offshore-style perps directly on its spot exchange.

Kalshi's BTCPERP breaks from those workarounds because the approved product itself has no fixed expiry. It's cash-settled, references the USD spot price of bitcoin via the CF Benchmarks Bitcoin Real Time Index, trades in units of 1/10,000 BTC, and runs 24/7 subject to Kalshi halts. The real significance is that the CFTC is treating perpetuals as a distinct product from standard delivery-based futures and letting the rules fit accordingly, allowing no expiry rather than forcing a five-year workaround.

That said, US perps still don't look like offshore perps end-to-end. BTCPERP drops the five-year-expiry workaround, but it still trades inside the legacy stack, with the DCM, clearinghouse, and approved intermediaries all included. 

This isn't immediately bullish or bearish for Hyperliquid. BTCPERP still depends on the legacy stack and does nothing to make crypto-native exchange layers like Hyperliquid compliant venues. If anything, broader legalization of products like 24/7 equity perps onshore could chip away at one piece of the offshore edge that deployers like TradeXYZ have offered. But the longer-term signal is constructive: the CFTC is showing willingness to adapt existing rules around crypto-native market structure. Optimistically, that flexibility eventually extends beyond traditional DCMs and clearinghouses, with the framework widening to include programmatic exchange layers like Hyperliquid.

— Shaunda

1. $PURR - Gamma Squeeze

Capital Flows argues that PURR is entering a setup similar to the 2021 GameStop squeeze, driven by a combination of accelerating liquidity, aggressive call buying, a small tradable float, and growing institutional demand. The thesis is that a broader credit cycle fueled “everything rally” is pushing capital further out on the risk curve, while PURR’s exposure to Hyperliquid, upcoming Russell index inclusion, and rising options activity could force market makers to buy shares as they hedge, creating a potential gamma squeeze.

The author believes the market is underestimating both Hyperliquid’s long-term growth and PURR’s positioning as one of the few liquid public vehicles for gaining leveraged exposure to that theme, making the stock a high-conviction asymmetric bet despite its elevated volatility and execution risk. 

2. Solana: Understanding REV

Joe Cho breaks down Solana’s Real Economic Value, framing REV as a cleaner measure of blockspace demand because it captures actual dollars paid by users and applications rather than activity metrics that can be inflated. The piece shows that Solana’s REV comes from both in-protocol fees and Jito tips, but that the mix has shifted as more execution demand is handled directly by the protocol. The key takeaway is that Solana has grown meaningful REV without recreating Ethereum’s 2021 fee spiral, generating roughly $1.4B of REV in 2025 while keeping median transaction fees below one cent. At the same time, application revenue has pulled ahead of network REV, reaching nearly 5x by Q1 2026, suggesting Solana is increasingly functioning as a low-cost execution platform where apps capture a growing share of end-user value.