tl;dr
Asset manager Bitwise files for a Hyperliquid ETF, aiming to capitalize on DeFi's growth amid fierce competition from Aster, which has seen explosive volume and open interest. The ETF's unique structure and regulatory hurdles could reshape crypto investing.
**Bitwise Eyes Crypto ETF Playbook with Hyperliquid Token, as Rivals Surge**
In a bold move to capitalize on the booming decentralized finance (DeFi) space, asset manager Bitwise has filed to launch an exchange-traded fund (ETF) that directly holds the Hyperliquid (HYPE) token. The proposed *Bitwise Hyperliquid ETF* aims to give investors exposure to the blockchain protocol behind one of the leading perpetual futures decentralized exchanges (DEXs), even as competition heats up with rivals like Aster.
The filing, submitted as a Form S-1 with the U.S. Securities and Exchange Commission (SEC), marks the first step in what could become a significant milestone for crypto ETFs. The ETF would hold HYPE tokens, which grant users discounts on Hyperliquid’s DEX and are used to pay fees on its blockchain. Unlike traditional ETFs, which typically hold cash or assets that mirror a benchmark, this fund would offer *in-kind redemptions*—allowing investors to exchange shares for HYPE tokens directly, rather than cash. This structure, permitted by the SEC in July, is designed to be more efficient and cost-effective.
But Bitwise’s ambitions come at a time of intense competition. Hyperliquid, once the dominant player in on-chain perpetual futures trading, has seen its market share challenged by Aster, a DEX built on the BNB Chain. Aster’s native token, ASTER, has surged in popularity, with trading volume and open interest skyrocketing. According to DefiLlama, Aster’s 24-hour trading volume hit $35.8 billion—more than triple Hyperliquid’s $10 billion—while its open interest (the value of unsettled contracts) spiked to $1.15 billion, up from just $143 million days earlier. Meanwhile, HYPE’s open interest fell 1.85% to $2.2 billion, and its price dipped 3.5% to $42.5.
The regulatory path for the Hyperliquid ETF remains uncertain. While the SEC recently streamlined approval processes for crypto ETFs by setting generic listing standards, Bitwise’s filing notes a critical hurdle: *there are currently no Hyperliquid futures contracts registered with the Commodity Futures Trading Commission (CFTC)*. This could complicate the ETF’s approval, as regulators may scrutinize the underlying asset’s liquidity and risk profile.
Still, the move underscores the growing appetite for crypto-linked ETFs. Last year’s Bitcoin and Ethereum ETF launches set a precedent, and Bitwise’s filing signals that investors are eager to bet on niche DeFi protocols. The ETF would join a crowded field, but its unique structure—directly holding HYPE and offering in-kind redemptions—could attract both retail and institutional buyers seeking exposure to decentralized finance.
As the SEC reviews the application, one question lingers: Can Hyperliquid reclaim its throne in a market where innovation moves at lightning speed? For now, Bitwise’s bet on HYPE is a high-stakes game, with implications for the future of crypto investing.
*What do you think? Will Hyperliquid’s ETF succeed, or will Aster’s rise redefine the DeFi landscape?*