Bitwise files for a Hyperliquid ETF, aiming to expand institutional access, boost HYPE adoption, and bridge crypto with traditional finance.
Bitwise Asset Management has moved to expand its crypto offerings with a filing for an exchange-traded fund focused on Hyperliquid. The proposed Bitwise Hyperliquid ETF would hold HYP bits directly, which is connected to the protocol and blockchain which powers the decentralized exchange of Hyperliquid. The token pays transaction fees and gives discounts on the platform. Therefore, it plays a central role in the network’s operations.
VanEck, Bitwise Signal Rising Interest in Hyperliquid ETFs
The filing on Thursday did not mention the exchange, ticker, or fees for the ETF. However, industry watchers said such details usually come later in the review process. If approved, the fund would follow the model used by existing Bitcoin and Ethereum ETFs with in-kind creation and redemption methods that reduce costs and enhance liquidity.
Related Reading: VanEck Eyes First HYPE Spot-Staking ETF in U.S. and Europe | Live Bitcoin News
Hyperliquid’s addition to an ETF filing is a significant event for the protocol. ETFs are often a bridge for traditionally regulated vehicles. This step puts HYPE within a class of tokens that are acceptable to the mainstream of investment institutions. The ETF would not only give it price exposure, but create new channels of demand, potentially increasing adoption of the token.
Competition in the sector is increasing. Earlier this year VanEck made plans for a spot-staking HYPE ETF in the United States and a related exchange-traded product in Europe. That structure would enable investors to earn staking rewards so that decentralized finance combined with traditional finance access. The fact that both VanEck and Bitwise are among those investors shows increasing institutional interest in Hyperliquid, which has become prominent for its perpetual futures protocol and blockchain ecosystem.
HYPE ETF Could Boost Market Reach, Pending SEC Clearance
The regulatory pathway, however, is unclear. Bitwise stated in its filing that there are no Hyperliquid futures on the Commodity Futures Trading Commission. This omission could make the review process of the U.S. Securities and Exchange Commission a bit more complicated. The SEC has historically relied on futures contracts as a benchmark for overseeing the markets and their absence may cause decision timelines to be longer.
Meanwhile, the SEC has already delayed decisions on several other altcoin ETF applications. These include Canary’s proposed spot SUI and PENGU funds, staked INJ and SEI funds and Avalanche ETFs from Grayscale and VanEck. The growing queue of pending applications indicates a strong momentum in the market but it also reflects continuing regulatory caution. Dozens of proposals are still being vetted because the SEC is trying to balance innovation and investor protection.
Bitwise’s push for a Hyperliquid ETF is part of the company’s push to branch out beyond the largest cryptocurrencies. The firm has made a name for itself for being one of the more aggressive asset managers to file for new products related to emerging digital assets. Approval of this fund could help them get early demand from investors who are looking for access to HYPE by a regulated structure.
If successful, the ETF would bring Hyperliquid even closer to becoming embedded in the global finance sector. However, a lot will hinge on regulatory approvals, market adoption and ability of HYPE, including sustaining demand in an increasingly competitive landscape.
