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