Clearly one origin of the word is hyperbole or exaggerated statement but there are other interesting roots. 'Hype' was an underworld slang word in the 1920s and continued into the Sixties. According to this usage to hype someone was to short change them and a 'hypester' a conman.
There was also a possible connection with drug slang: 'hype' being a shortening of hypodermic needle.
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