Hyperliquid Strategies has confirmed it is continuing to accumulate HYPE tokens, despite reporting a $165 million loss tied to the position. The Nasdaq-listed firm, which trades under the ticker PURR , is effectively built around a single strategy betting on sustained upside in HYPE. On May 7, the company submitted its quarterly filing to the U.S. Securities and Exchange Commission, along with a press release confirming the reported figures. Where did the $165 million loss come from? A large portion stems from market volatility. Hyperliquid Strategies purchased HYPE tokens at higher prices , and when the market value fell below its acquisition cost, the company was required to record unrealized, or “paper,” losses. That accounting adjustment accounted for about $64 million . These losses don’t affect cash holdings and would reverse if token prices recover. A while back, the company also acquired Sonnet BioTherapeutics and assigned a dollar value to all the legacy medical research projects it inherited. But since it’s getting rid of the projects, it made a one-time accounting entry and wrote off $35.6 million from the old medical business. Lastly, the company recorded $60.5 million as set aside for future taxes because HYPE’s price increased, even though the government has yet to receive the cash. Together, the $64 million, $35.6 million, and $60.5 million total to $160 million, and the remaining $5 million was used to pay staff, rent, legal fees, and other normal business costs. David Schamis , CEO of Hyperliquid Strategies, had this to say in the SEC filing , May 7, 2026. “This quarter marked meaningful progress in establishing HSI as the leading public vehicle for capital-efficient HYPE exposure, amid Hyperliquid’s continued dominance in on-chain finance.” How did Hyperliquid Strategies also make $152 million despite the losses? Hyperliquid Strategies recorded losses of $165 million from July 2025 to March 2026. However, HYPE’s price rose sharply between January and March 2026, and the company recorded $198.4 million in paper gains . The company made tax adjustments of $42.7 million and sorted other business costs, leaving a net profit of $152.5 million . According to the SEC filing, the company currently holds 20 million HYPE tokens as of April 29, 2026. The quarter-end price is $36.60 per token, so the 18.83 million tokens that Hyperliquid Strategies held on March 31 were worth $689 million. The company also held $113.1 million in cash as of March 31, but as it continued buying tokens and covering expenses, liquidity dropped to $103 million. In short, Hyperliquid Strategies’ total assets are worth $809.4 million, and the debts are zero. Once you remove all obligations, shareholders are left with $743.5 million in equity, which is very healthy for a company that reported a “$165 million loss.” According to the official press release, Hyperliquid Strategies announced its partnership with Unit Labs on the same day it released its financial report. The two companies will form a shared validator, with Hyperliquid Strategies providing the capital in the form of HYPE tokens and Unit Labs providing the technology to sustain such a high-quality validator 24/7. Anchorage Digital Bank holds large amounts of digital assets safely for institutional investors and will be responsible for storing the HYPE tokens allocated to the validator. Because validators earn fees generated by the network, Hyperliquid Strategies will receive fee rewards as the platform grows and more people trade on it. What are the real risks? The biggest risk Hyperliquid Strategies faces right now is if HYPE’s price drops and stays down. That means the company’s $689 million in token holdings would decline in value, and its paper losses would grow. And if the token falls far enough, the company would have no choice but to sell tokens to cover its running costs, turning paper losses into real ones. Another risk Hyperliquid Strategies faces is user churn, as it depends on trading volume. If a competing company launches and wins over users, fees drop, leading to fewer buybacks of HYPE token, which are holding up its price. Any major changes in the crypto regulations could affect the company’s entire strategy. Hyperliquid Strategies even acknowledges this in its SEC filing, listing material risks, including “significant legal, commercial, regulatory and technical uncertainty regarding HYPE tokens.” Investing in PURR stock is no different than investing in HYPE’s price with an extra layer of company costs on top. Your bank is using your money. You’re getting the scraps. Watch our free video on becoming your own bank