Bitwise Files for ETF Tracking Hyperliquid Token Amid Rising DEX Competition

Asset manager Bitwise has taken a new step into the fast-growing world of decentralized exchanges by filing to launch an exchange-traded fund (ETF) tied to the Hyperliquid token. 

According to a regulatory submission on Thursday, the proposed Bitwise Hyperliquid ETF would directly hold Hyperliquid’s native cryptocurrency, HYPE. The token powers the Hyperliquid blockchain and decentralized perpetual futures platform, offering fee discounts on its exchange and acting as a payment method for network transactions.

The filing did not disclose which exchange the ETF would list on, its trading ticker, or the fees Bitwise plans to charge. Still, the move signals a bid to expand crypto-based investment products beyond Bitcoin and Ether, both of which saw strong ETF debuts last year.

ETF Designed for In-Kind Redemptions

Bitwise said the fund will track the value of HYPE held by the trust and allow in-kind creation and redemptions, meaning shares of the ETF can be exchanged directly for Hyperliquid tokens rather than cash. This structure, recently endorsed by the U.S. Securities and Exchange Commission (SEC), is considered more efficient and cost-effective for crypto-based funds.

The company filed a Form S-1 under the Securities Act of 1933, which permits ETFs to hold digital assets directly. To move forward, Bitwise must also submit a Form 19b-4, starting a review period that could last up to 240 days. 

While the SEC recently streamlined approval for certain crypto ETFs, Bitwise acknowledged that “there are currently no Hyperliquid futures contracts registered with the CFTC,” a factor that may influence the timeline.

Market Rivalry Heats Up as Aster Gains Momentum

Bitwise’s application arrives during a fierce competition among perpetual futures decentralized exchanges. Earlier this month, rival DEX Aster—which operates on the BNB Chain—launched its own token and quickly drew record activity. 

Data from DefiLlama shows Aster’s trading volume soared to an all-time high of $70 billion on Thursday, with $35.8 billion in 24-hour volume—more than triple Hyperliquid’s $10 billion over the same period.

Open interest on Aster’s ASTER token surged to $1.15 billion, up from just $143 million days earlier. By comparison, Hyperliquid’s HYPE token saw open interest fall slightly to $2.2 billion, while its price slipped 3.5% to about $42.50, according to CoinGlass.

Bitwise’s ETF proposal underscores the growing investor appetite for diverse crypto exposure, but its success will depend on regulatory approval and Hyperliquid’s ability to fend off intensifying competition from upstart platforms like Aster.