Crypto projects have spent nearly $638M on buying back their own tokens since the start of the year, using a mechanism widely used in stock markets to reduce supply — Financial Times reports this, citing data from blockchain analytics platform Allium Labs. Almost 90% of this year’s spending came from two projects — Hyperliquid and meme coin platform pump.fun.
During the same period last year, total buybacks across the crypto market amounted to $545M, while projects spent only $366,000 on buybacks for the whole of 2024.
Hyperliquid Buybacks
Hyperliquid directs 99% of its trading fee revenue toward buying back HYPE. Since the exchange launched in December 2024, the project has bought back and burned $1.3B in tokens, while HYPE has gained around 70% over the past year.
Bitwise Chief Investment Officer Matt Hougan links HYPE’s rise to the large-scale buyback program. In his view, the program has shown investors that growing network activity can have a direct impact on the token’s price.
Buybacks Do Not Always Help Token Prices
The link between buybacks and token performance remains unclear. For example, Jupiter spent nearly $14M on its program, while JUP has fallen 55% over the past year. Chainlink has also bought back its own tokens, but LINK has lost around 50% of its value in dollar terms.
Helium ended its program in February. Protocol co-founder Amir Haleem explained the decision by saying that the buybacks had not had a noticeable impact on the market, after which the team decided to stop allocating budget to them.
“The existence of a buyback program by itself says nothing about the quality of a project and does not guarantee a significant price increase,” said Elton Shedula, head of research at Allium Labs.
Keyrock expert Amir Hajian notes that traders are increasingly looking at the economic value of owning a token and a project’s fundamentals, rather than relying solely on market hype.
U.S. Regulatory Pressure on Buybacks Has Eased
Previously, teams were wary of launching buyback programs because of possible regulatory pressure. Under the Trump administration, the U.S. authorities’ stance toward crypto assets has become more relaxed, making it easier for project leadership teams to approve such decisions.
Shedula sees buybacks as a way for teams to demonstrate confidence in their own token to holders. Reducing the number of coins in circulation can also affect their price.
Token Buybacks in Other Projects
Sky Protocol has bought back $26M worth of tokens, according to Allium data. Protocol co-founder Rune Christensen said that Sky generated more than $400M in revenue over the past year, while SKY buybacks are intended to align the interests of governance participants with the protocol’s long-term performance. SKY holders vote on issues related to its development, and the token has gained 5% over the past year.
In August, staking protocol Lido announced plans to conduct regular buybacks to strengthen the link between the token’s price and the protocol’s performance. One of the conditions for launching the program will be annual revenue of around $40M.
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