Token Buybacks Are Booming. But Do They Really Make Crypto Tokens Go Up?

• Crypto protocols spent $1.4 billion on token buybacks in 2025.
• Only 3 of 10 major buyback tokens beat Bitcoin in price performance.
• Buyback size, revenue and supply matter more than headlines.

Crypto protocols spent more than $1.4 billion buying back their own tokens in 2025. Hyperliquid alone made up about 46% of that total, using roughly 97% of its trading fees to buy HYPE.

Other major protocols, including Aave, Uniswap, Sky, Pump.fun, Aptos, and Solana, are trying similar strategies: use protocol revenue to support the value of their tokens.

The idea is that if a protocol makes money and uses that money to buy or burn its own token, the supply falls and demand could rise.

CIO Bitwise Matt Hougan recently pointed to these moves as signs that the market may still be undervaluing how protocols can capture revenue.

But does this strategy actually work?

The performance record is mixed

Recently, analyst Bill Hsu studied 10 major tokens with active buyback programs. Only three AAVE, HYPE, and SKY performed better than Bitcoin during the buyback period.

That means 7 out of 10 still underperformed Bitcoin.

So, announcing a buyback does not automatically mean a token will do better. Investors also need to look at how much money the protocol is actually making, rather than focusing only on the buyback news.

Size matters more than the announcement

The buybacks that worked best were not just big announcements. They were large compared with the token’s supply and the protocol’s revenue.

Hyperliquid has spent about $644 million buying back HYPE using ongoing trading fees. Pump.fun has burned about 36% of its token supply and uses half of its revenue for more burns. 

Uniswap has burned more than 107 million UNI and started its fee system. Aave also uses protocol revenue for regular buybacks.

A small buyback may have little effect on price, even if the dollar amount sounds large. The key is to compare the buyback with the token’s total supply and market value. 

For example, a $20 million buyback that removes 13% of a token’s supply, as GMX has done, could have a bigger impact than a $150 million buyback that removes only 5% of a larger token’s supply.

Why HYPE stands out

Notably, Hyperliquid’s buyback system is different because it happens continuously and is directly linked to trading activity.

When trading volume goes up, HYPE buybacks go up too. The process does not depend on a vote, a treasury decision, or a foundation choosing to act.

This makes the system more predictable than other buyback programs, which can slow down or stop when funds run low.

HYPE’s strong performance suggests that consistent buybacks may matter more than simply announcing a large buyback.

Related: Hyperliquid Price Prediction: HYPE Eyes $60 as Derivatives Activity Stabilizes

Building a simple framework

For traders, the key is to follow the money: How much revenue does the protocol make? How much goes to buybacks or burns? How many tokens are removed? How does that affect the token supply? And does the price actually improve?

Aptos is a good example. In April 2026, it approved a maximum supply of 2.1 billion APT and increased gas fees tenfold, with all those fees being burned.

Solana is considering something similar. A proposed change could increase daily SOL burns by about 12 to 14 times. But even then, the network would still create more SOL each day than it burns. So the change would reduce inflation rather than make SOL fully deflationary.

Essentially, burning tokens does not always mean the token becomes scarcer. Sometimes burns simply reduce the rate at which supply grows.

Buybacks and burns also need to be sustainable. A protocol with weak revenue, or a burn that removes only a tiny amount of a large token supply, may have little real impact.