Data & Insights: Strategy's Strategic Stretch; HIP Highs

Strategy’s Stretching Routine

• Strategy's Bitcoin treasury reached 738,731 BTC last week
  • This comes after the firm added 17,994 BTC for $1.28 billion over the prior week, its largest single-week accumulation since their late 2024 buying spree.
• From this, the STRC “flywheel” mechanism has become Strategy's most efficient capital engine for Bitcoin accumulation
  • STRC is a Variable Rate Series A Perpetual Stretch Preferred Stock with a $100 par value and a variable monthly dividend, currently at an annualized 11.5% rate. 
  • The "flywheel" operates as follows: Strategy adjusts the STRC dividend rate each month to anchor STRC's trading price near $100 par. If the price dips below $100, they raise the yield to attract buyers. If it climbs above $100, the yield drops.
  • When STRC trades at or above $100, Strategy activates its at-the-market (ATM) issuance program, selling freshly issued STRC shares directly into market demand. Those proceeds go straight to Bitcoin purchases.
  • The cycle repeats: yield-seeking investors buy STRC for income, Strategy sells new shares into that demand, and the capital flows into BTC.
  • The instrument behaves like a high-yield credit product from the investor's perspective while functioning as an equity-to-Bitcoin conversion engine for Strategy.
  • This week's $409 million volume day for STRC, roughly $177 million of which traded above par, demonstrates the loop firing at peak efficiency.
• However, STRC does have a looming structural risk, that being its ex-dividend mechanics.
  • After each monthly ex-dividend date, the latest being last Friday, the share price typically declines by the dividend amount.
  • If STRC trades persistently below par, Strategy must increase the dividend rate to stabilize the price, meaning higher cash outflows. In a severe (though highly unlikely) scenario, the company could face pressure to sell Bitcoin to cover those payments.

Monitoring The Situation 24/7

• Aggregated open interest (OI) across Hyperliquid's HIP-3 markets reached a record $1.43 billion on Saturday.
  • This represents an over 100x increase from when the first HIP-3 markets launched just six months ago.
  • Trade.xyz, built by Hyperliquid's own tokenization arm Hyperunit, dominates HIP-3 with nearly 90% of all OI.
  • The platform's growth curve has been essentially vertical, with daily trading volumes of $22 billion, capturing roughly 90% of total HIP-3 activity.
  • What makes the growth interesting is that from the top 30 markets on trade.xyz, only 7 are crypto pairs.
  • The remaining are tokenized "traditional" assets such as equity futures and contracts for the S&P500, NASDAQ and individual stocks, as well as commodity contracts for Gold, Silver and Crude Oil.
• The main reason for the growth in these “non-crypto” contracts can be attributed to the ability for HIP-3 markets to operate 24/7, offering price discovery for equities and commodities during weekends and off-hours when traditional exchanges are closed.
  • This weekend trading utility has attracted a class of traders who previously had no venue for such activity, expanding the addressable market beyond the crypto-native user base.
  • The HYPE token has been one of the best performing crypto assets in the market, being up over 50% YTD, an impressive feat considering Bitcoin itself is down by over -15% in the same period.
  • Hyperliquid has also recently announced HIP-4, which will enable permissionless listings of prediction markets, representing another high-potential growth vector for the ecosystem.

Bitcoin Futures No Open Interest

• Aggregated Bitcoin futures open interest has fallen to 12-month lows of $28.6 billion, a steep contraction from the cycle peak of approximately $61.6 billion reached around October 10, 2025. 
  • The roughly 54% drawdown in OI mirrors the broader collapse in crypto mindshare since then, with BTC itself down over 44% from its all-time high of $126,000 to current levels around $71,000.
• The sustained failure to reclaim prior OI levels, even as price has partially stabilized in the $66,000–$72,000 range, points to a structural de-leveraging rather than a typical post-correction reset. Positioning has not meaningfully rebuilt, so speculative appetite remains suppressed.
  • The macro backdrop has played a role in fueling the hesitation. Ongoing geopolitical uncertainty stemming from the Iran conflict, elevated energy prices, and a hawkish Federal Reserve heading into the March 17–18 FOMC meeting have collectively pushed risk assets into a cautious posture. Crypto, still broadly classified as a risk asset, has not been immune to that repricing.
• Despite the aggregate compression, Binance continues to command roughly 30% of global Bitcoin futures open interest, maintaining its position as the largest derivatives venue and underscoring how concentrated liquidity remains even as overall positioning thins out.

Who’s paying Ethereum?

• The 7-day moving average of average transaction fees on Ethereum has declined to 12-month lows of roughly $0.15, a significant compression from the $1 range that characterized much of 2025. 
  • The primary driver has been the continued migration of user activity to Layer 2 networks. Ethereum L2s now collectively hold approximately $30 billion in TVL, with Base and Arbitrum alone accounting for nearly 90% of that figure.
  • Daily transaction throughput on L2s has consistently eclipsed mainnet activity, absorbing the retail and speculative trading volume that once generated meaningful L1 fee pressure.
• What makes the current fee environment notable is that it coincides with accelerating institutional adoption of the network. 
  • Tokenized RWAs on public blockchains have climbed roughly 66% in 2026 to approximately $23.6 billion, with Ethereum hosting the majority of that value. 
  • Tokenized U.S. Treasuries alone have surpassed $11 billion. These assets settle on Ethereum but generate relatively low transaction volumes, meaning institutional adoption is growing the network's economic footprint without proportionally lifting fees.
• Low fees lower barriers for the next wave of onchain use cases. The open question is whether the network can generate sufficient fee income.

Interesting Every Day

• Polymarket's daily open interest has grown roughly 4x over the past 12 months, climbing from approximately $106 million in March 2025 to $466 million. 
  • The trajectory has been largely uninterrupted, and the pace of market creation has followed. New markets on the platform surpassed 125,000 in February, reflecting both broadening subject matter and sustained user engagement.
• The Iran conflict has been the most visible stress test of prediction markets as an information tool. A long-running contract on whether the U.S. would strike Iran accumulated over $529 million in total volume, making it one of the largest markets in the platform's history. 
  • Polymarket itself framed the moment as a demonstration of utility, stating that prediction markets could give people affected by the conflict answers "in ways TV news and X could not."
• The Iran cycle also surfaced the tensions that come with scale. Onchain analysts flagged six wallets that made approximately $1.2 million by correctly betting on a February 28 U.S. strike, intensifying scrutiny around potential insider trading. 
  • Lawmakers raised concerns about a lack of regulation, and government watchdogs noted that federal rules already prohibit futures contracts based on assassinations, war, or terrorism.
• The open interest growth suggests demand for real-time probabilistic pricing of world events is genuine and expanding. Whether that translates into a durable, regulated financial primitive or remains a largely offshore product will likely define the next phase of the sector's development.