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Asset management firm Bitwise has taken a significant step in expanding crypto investment products by filing to launch an exchange-traded fund (ETF) that will directly hold Hyperliquid (HYPE) tokens. The move comes amid intensifying competition in the perpetual decentralized exchange (DEX) sector, with trading volumes on crypto futures platforms reaching all-time highs.
The proposed Bitwise Hyperliquid ETF is designed to provide investors with exposure to Hyperliquid’s token, which offers discounts on its DEX and is integral for paying fees on its blockchain. According to the regulatory filing submitted on Thursday, the product will aim to mirror the approach of Bitcoin and Ether ETFs by offering in-kind creation and redemptions, allowing investors to exchange shares for actual HYPE tokens instead of cash.
What the Hyperliquid ETF Will Offer
Bitwise’s filing indicates that the ETF will hold Hyperliquid tokens directly, tracking the value of HYPE held by the trust. This structure is similar to popular spot crypto ETFs, enabling investors to gain direct exposure to the underlying asset. The in-kind creation and redemption process approved by the SEC in July aims to reduce costs and improve efficiency for crypto ETFs, a mechanism that Bitwise plans to leverage.
While the filing does not yet disclose the exchange on which the ETF will trade, its ticker, or associated fees, it represents the first step in a regulatory process. The ETF will also require a Form 19b-4 filing with the SEC, which can take up to 240 days before approval.
Rising Perpetual Futures Competition
The timing of Bitwise’s filing coincides with rising competition among perpetual futures DEXs. Hyperliquid, a longstanding leader in on-chain futures trading, is facing increasing pressure from Aster, a new DEX on the BNB Chain. Aster has seen a dramatic surge in both trading volume and open interest since its token launch earlier this month.
According to DefiLlama, Aster’s 24-hour trading volume recently surpassed $35.8 billion, more than tripling Hyperliquid’s $10 billion over the same period. Open interest on Aster’s token also jumped from $143 million on September 20 to $1.15 billion on September 25, highlighting a rapidly growing user base and rising market attention.
Hyperliquid, by comparison, saw its HYPE token’s open interest decline 1.85% over the same period to $2.2 billion, with the token price dropping 3.5% to $42.5, according to CoinGlass. The increasing competition from Aster underscores the dynamic nature of perpetual futures markets and the challenges Hyperliquid faces in maintaining dominance.
Regulatory Context for Spot Crypto ETFs
Bitwise’s filing follows broader regulatory trends in the U.S. that aim to streamline approvals for crypto ETFs. In recent months, the SEC introduced generic listing standards, reducing the need for individual assessment of each product. This policy shift allows ETF providers to accelerate filings, provided the underlying asset has been traded for at least six months on a Commodity Futures Trading Commission (CFTC)-regulated exchange.
However, a key challenge for the Hyperliquid ETF is that there are currently no Hyperliquid futures contracts registered with the CFTC. This means the SEC’s streamlined approach may not fully apply, potentially extending the approval timeline.
Why Bitwise is Expanding Its Crypto Offerings
Bitwise is looking to broaden its product lineup beyond its existing ETFs, aiming to capitalize on the growing demand for regulated crypto exposure. The firm has positioned itself as a leading provider of crypto-focused investment products in the U.S., with prior ETFs for Bitcoin and Ether achieving significant inflows.
The Hyperliquid ETF would allow investors to participate in a unique segment of the crypto market: perpetual futures on decentralized exchanges. By holding the underlying token, the fund can provide a more direct and transparent method of exposure compared to derivative-based products.
Market Implications
The introduction of a spot Hyperliquid ETF could bolster HYPE adoption and liquidity, potentially strengthening Hyperliquid’s position amid rising DEX competition. For investors, it represents an opportunity to access a token closely tied to one of the fastest-growing segments in crypto: decentralized perpetual futures.
However, the competitive environment remains intense. Aster’s rapid growth and volume surge signal that market leadership in the DEX space is increasingly contested. Investors will need to monitor how Hyperliquid responds to this challenge, and whether regulatory approval for the ETF aligns with market momentum.
Conclusion
Bitwise’s filing for a spot Hyperliquid ETF marks a notable step in the maturation of crypto investment products. By enabling direct token exposure with in-kind creation and redemption, the ETF aligns with growing institutional interest in regulated crypto offerings.
At the same time, the rise of competitors like Aster highlights the intense pressure on Hyperliquid to maintain relevance in the fast-evolving perpetual DEX sector. For investors, the ETF offers a regulated pathway into HYPE tokens, while also signaling a broader trend: the expansion of accessible, institutional-grade crypto products in the U.S.
With the approval process potentially taking months, market participants will watch closely to see whether Bitwise can leverage this filing to solidify Hyperliquid’s position and capture investor interest in one of crypto’s most dynamic markets.
