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Bitwise's HYPE ETF Seeks to Establish DeFi as a Recognized Player in Traditional Finance

Bitwise's HYPE ETF Seeks to Establish DeFi as a Recognized Player in Traditional Finance

Bitget-RWA2025/09/26 04:02
By:Coin World

- Bitwise files HYPE ETF proposal with SEC, offering direct token exposure via Coinbase custody and in-kind creation. - HYPE token's $11B market cap and DeFi governance role position it as a non-Bitcoin/Ethereum ETF asset candidate. - SEC's in-kind redemption approval enhances efficiency, but altcoin ETF approvals remain pending amid regulatory scrutiny. - Hyperliquid faces DEX competition from Aster (358% volume surge) as traders seek MEV-mitigation tools and multi-chain support.

Bitwise's HYPE ETF Seeks to Establish DeFi as a Recognized Player in Traditional Finance image 0

Bitwise Investment Advisers has submitted an S-1 registration to the U.S. Securities and Exchange Commission (SEC) for an exchange-traded fund (ETF) that would offer direct investment in Hyperliquid’s native token, HYPE. The ETF, set up as a Delaware statutory trust, will be physically backed by HYPE tokens, which will be held in custody by

Custody Trust Company. Unlike ETFs based on futures, this product will not use derivatives or leverage, mirroring the structure of current spot and Ether ETFs. Shares will be issued and redeemed in large batches by authorized participants, and the net asset value (NAV) will reflect HYPE’s daily market price. The SEC’s recent endorsement of in-kind creation and redemption for crypto ETFs is anticipated to improve efficiency and lower investor costs.

Hyperliquid is a Layer 1 blockchain tailored for decentralized finance (DeFi), known for its robust perpetual futures trading. The HYPE token, which provides governance rights and trading fee discounts, has a circulating supply of 270.8 million and a market cap of $11 billion, making it the 21st largest cryptocurrency The Block [ 1 ]. Despite its size, HYPE has experienced price swings, dropping 11% in the 24 hours before the ETF filing The Block [ 1 ], then rebounding 4% to $42.50 after the news Blocknews.com [ 2 ]. Experts see the ETF as a significant step for decentralized perpetuals, potentially boosting HYPE’s liquidity and establishing it as a noteworthy ETF asset beyond Bitcoin and Ethereum Blocknews.com [ 2 ].

This filing comes as competition intensifies among decentralized exchanges (DEXs) specializing in perpetual futures. Hyperliquid’s 24-hour trading volume recently dropped to $10.1 billion, while Aster, a new

Chain-based DEX, posted $35.8 billion in trading volume during the same period The Market Periodical [ 5 ]. Aster’s token, ASTER, has soared over 2,000% in a week, fueled by features such as hidden orders and support for multiple chains. This trend highlights broader shifts in the market, with DEXs collectively handling $67.1 billion in on-chain perpetual futures trades on September 25, 2025 SEC Newsroom [ 7 ]. Hyperliquid’s market share has declined as traders move to platforms offering MEV protection and new incentive models BeInCrypto [ 6 ].

Regulatory changes have also transformed the crypto ETF sector. The SEC’s approval in July 2025 of in-kind creation and redemption for crypto ETPs marks a shift from previous cash-only approaches, reducing operational hurdles and tax issues for institutional players. Bitwise’s HYPE ETF proposal takes advantage of these new rules, aiming to align with established practices for commodity ETFs. The SEC is also working to simplify the approval process for crypto products, with new generic listing rules that remove the need for case-by-case reviews if assets have traded for at least six months on CFTC-regulated exchanges The Market Periodical [ 5 ].

The proposed ETF highlights Bitwise’s reputation as a pioneer in crypto asset management, broadening access to alternative tokens for both institutional and retail investors. For Hyperliquid, the fund could drive adoption by connecting DeFi-native assets with traditional financial markets. However, SEC approval is not guaranteed, as the agency has postponed decisions on several altcoin ETF applications, including spot

and PENGU funds from Canary The Block [ 1 ]. Meanwhile, the rapid growth in DEX activity—led by platforms like Aster and Hyperliquid—underscores the sector’s expansion and the ongoing need for regulatory clarity to maintain momentum ETF.com [ 8 ].

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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