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Asset manager Bitwise has submitted a filing to launch an exchange-traded fund (ETF) focused on the Hyperliquid perpetual futures protocol and its native token, HYPE. This move comes as the decentralized exchange (DEX) landscape intensifies, with new players challenging established leaders in the on-chain futures trading space.
Key Takeaways
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Bitwise has filed for a spot Hyperliquid ETF, aiming to track the HYPE token.
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The filing occurs amidst a heated competition among perpetual futures DEXs, with Aster gaining significant traction.
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The proposed ETF would offer in-kind creation and redemption, allowing direct token swaps.
Bitwise Hyperliquid ETF Filing
Bitwise's application, a Form S-1 filed with the Securities and Exchange Commission (SEC), outlines the intention to create the Bitwise Hyperliquid ETF. This fund would directly hold the Hyperliquid (HYPE) token, which is integral to the protocol, offering discounts on its decentralized exchange and serving as payment for blockchain fees. The filing does not yet specify the exchange where the ETF will trade, its ticker symbol, or associated fees.
This strategy mirrors the successful launches of spot Bitcoin and Ether ETFs, aiming to provide investors with direct exposure to the value of the Hyperliquid token. A notable feature of the proposed ETF is its plan for in-kind creation and redemption. This mechanism, previously approved by the SEC for crypto products, allows for the exchange of ETF shares for the underlying HYPE tokens, rather than solely relying on cash transactions, which the SEC has described as more efficient.
The DEX Wars Intensify
The timing of Bitwise's filing is significant, coinciding with a period of heightened competition in the perpetual futures DEX market. Aster, a DEX operating on the BNB Chain, has recently experienced a dramatic surge in trading volume and open interest, surpassing Hyperliquid, which had previously held the top position for on-chain futures trading. Data indicates that Aster's trading volume has more than tripled Hyperliquid's in recent periods. Similarly, open interest for Aster's native token has seen a substantial increase, while Hyperliquid's open interest has seen a slight decline.
Regulatory Pathway
While the Form S-1 filing is a crucial first step, Bitwise must also submit a Form 19b-4 to initiate the SEC's approval process. This process could potentially take up to 240 days. Although the SEC has streamlined the approval process for crypto ETFs by establishing generic listing standards, Bitwise acknowledges in its filing that there are currently no Hyperliquid futures contracts registered with the Commodity Futures Trading Commission (CFTC), a factor that could influence the approval timeline.
Key Takeaways
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Bitwise Bids for Spot Hyperliquid ETF Amid DEX Wars, Cointelegraph.
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