Custody Platform Economics: Kpi Interpretation, Gross Vs Net Accounting, And Concentration Risk
Key takeaways
- BitGo’s post-IPO float was described as small because ~11.8M shares were tradable at launch while ~103M shares were locked for 180 days, implying potential future supply overhang at unlock.
- The recent surge in metals trading activity on HIP-3 may be spiky and non-recurring, so extrapolating recent volumes into a forward growth thesis could be misleading.
- After a large run-up, Kinetic was described as no longer an obvious long because it may be priced as a successful market deployer, has some inorganic volume from a points program, is illiquid, and needs a step-up in revenue to justify price.
- A tracked wallet attributed to the suspected HYPE seller appears to have sold nearly all HYPE and held only a negligible residual balance (~$8.80).
- A host/panelist disputed the idea that metals investors will rotate into Bitcoin after a metals rally, arguing that Bitcoin’s fundamentals are weak and narratives often follow price rather than drive it.
Sections
Custody Platform Economics: Kpi Interpretation, Gross Vs Net Accounting, And Concentration Risk
The corpus argues that multiple BitGo headline metrics can mislead without normalization: assets-on-platform can move with market prices, client counts can be threshold-defined, and retail users are reported cumulatively. The central mechanism is gross accounting that can report notional trading/staking flows as revenue with pass-through costs, so take-rate (net) is the economic signal. It also highlights business fragility via segment subsidy dependence (services subsidized by trading/staking), staking concentration (Sui exposure), and non-operating mark-to-market gains boosting reported profits, plus a technical watch item of potential lockup-overhang.
- BitGo’s post-IPO float was described as small because ~11.8M shares were tradable at launch while ~103M shares were locked for 180 days, implying potential future supply overhang at unlock.
- BitGo reported approximately $84B of “assets on platform,” down from about $101B in Q3, largely due to market moves.
- BitGo reported 1.17M retail wallet users as a cumulative count since around 2013, and quarterly new-user additions slowed from about 23K in Q3 to about 7K in Q4.
- BitGo’s reported 5,100 “clients” includes any wallet balance over $1M, which may overstate true business relationships as crypto prices rise and users cross that threshold.
- BitGo reported about $16B of 2025 revenue while trading around a ~$1.5B valuation, and the headline revenue is largely driven by GAAP-style reporting that books gross transaction volume as revenue.
- For trading, BitGo can record the full notional of a swap as revenue and record user payouts as costs, leaving the spread as the true economic take.
Onchain Perps Expansion Into Commodities And The Quality Of Volume
The corpus reports a sharp rise in commodities (especially silver) trading on Hyperliquid/HIP-3, including silver ranking near the top of venue activity. It simultaneously warns that headline volume may be distorted by fee subsidies and points farming, and that the metals surge may be transient. Competitive dynamics on HIP-3 are framed as a contest between liquidity provision and distribution via front-end control, while structured/basket products show weak traction.
- The recent surge in metals trading activity on HIP-3 may be spiky and non-recurring, so extrapolating recent volumes into a forward growth thesis could be misleading.
- Silver was the second most traded market on Hyperliquid over the prior 24 hours and surpassed ETH in trading activity over that window.
- In HIP-3 perp markets where multiple deployers list the same underlying, deployers can compete by sourcing superior liquidity via market makers or by owning the front end and routing users to their pair even if it is not the most liquid.
- On Hyperliquid HIP-3 markets, cited volume reached about $2.2B out of $19B total (over 10% share), with a large portion attributed to XZY and about $1.4B tied to silver.
- Hyperliquid revenues were described as significantly lower during a “growth mode,” with an estimate of roughly 90% lower revenue despite higher apparent activity.
- Felix’s silver market reportedly did not have growth mode fees and still ranked in the top 10 by volume at about $77M on the cited day.
Protocol-Adjacent Token Value Capture Shifts And Incentive Risk (Kinetic)
The corpus describes Kinetic’s monetization shifting from churn-linked withdrawal fees toward a broader market-deployer model with an explicit buyback policy. It flags supply dynamics (no near-term unlocks) as a demand/supply consideration and warns that points-driven activity and illiquidity can make revenue sustainability the gating variable after a run-up.
- After a large run-up, Kinetic was described as no longer an obvious long because it may be priced as a successful market deployer, has some inorganic volume from a points program, is illiquid, and needs a step-up in revenue to justify price.
- Kinetic initially monetized mainly via a 10 bps withdrawal/conversion fee (kHYPE back to HYPE), and this revenue peaked during a points-program-driven churn period before declining as LST behavior became stickier.
- Kinetic’s KIP-2 (late December) formalized expansion beyond an LST into a Hyperliquid market-deployer layer and set a policy to use revenues for token buybacks with a 90/10 split (90% to Kinetic, 10% to kHYPE).
- Kinetic’s token supply was described as having no unlocks for about a year, supporting a thesis of re-rating tied to perceived exposure to Hyperliquid exchange economics.
Flow Overhangs And Non-Fundamental Drivers In Token Markets
The corpus attributes HYPE weakness primarily to identifiable forced/large-seller distribution rather than a change in fundamentals, and then updates that the tracked wallet appears largely exhausted. The key mechanism is that a known, large supply overhang can suppress marginal bids until participants believe distribution has ended.
- A tracked wallet attributed to the suspected HYPE seller appears to have sold nearly all HYPE and held only a negligible residual balance (~$8.80).
- A Tornado Cash-linked entity liquidated a nine-figure HYPE position, creating selling pressure and a market overhang that reduced willingness to buy until distribution ended.
Bitcoin Framing: Correlation Regime And Narrative Skepticism
The corpus frames BTC as trading with risk-on tech and disputes a specific cross-asset narrative (metals-to-BTC rotation), emphasizing that narratives may trail price action. The actionable implication is to treat correlation and flow data as required validation rather than relying on post-hoc storytelling.
- A host/panelist disputed the idea that metals investors will rotate into Bitcoin after a metals rally, arguing that Bitcoin’s fundamentals are weak and narratives often follow price rather than drive it.
- Bitcoin was described as trading like a “frontier asset” alongside other risk-on tech bets (e.g., Nvidia), with correlation expected to persist unless a new dominant narrative emerges.
Watchlist
- The recent surge in metals trading activity on HIP-3 may be spiky and non-recurring, so extrapolating recent volumes into a forward growth thesis could be misleading.
- BitGo’s post-IPO float was described as small because ~11.8M shares were tradable at launch while ~103M shares were locked for 180 days, implying potential future supply overhang at unlock.
- After a large run-up, Kinetic was described as no longer an obvious long because it may be priced as a successful market deployer, has some inorganic volume from a points program, is illiquid, and needs a step-up in revenue to justify price.
Unknowns
- Are there additional wallets or exchange deposit addresses linked to the suspected HYPE seller beyond the tracked wallet, and has distribution fully ended across all linked entities?
- What is the 30/90-day persistence of HIP-3 commodity volumes (especially silver) and their share of total Hyperliquid volume after the cited spike window?
- What are the exact fee schedules and effective take-rates during Hyperliquid “growth mode,” and how do revenues normalize when incentives change?
- How much of Hyperliquid’s volume is points-farmed versus organic, using observable indicators such as maker/taker mix and bot-like patterns?
- Will Hyperliquid spot assets actually launch “relatively soon,” and if so, what initial market structure (assets, fees, incentives) will be used?