Bitwise's HYPE ETF: Bridging DeFi and Traditional Markets

Bitwise Asset Management has filed a Form S-1 with the U.S. Securities and Exchange Commission to launch the first exchange-traded fund (ETF) directly tracking the native token of Hyperliquid (HYPE). The proposal, announced on September 25, 2025, positions the Bitwise Hyperliquid ETF as a milestone in institutional adoption of decentralized finance (DeFi) assets. The fund will be physically backed by HYPE tokens, custodied by Coinbase, and structured with in-kind creation and redemption mechanisms similar to existing Bitcoin and Ethereum ETFs. This move follows a broader trend of crypto asset managers seeking regulated access to emerging tokens, with Bitwise emphasizing the fund’s potential to bridge DeFi and traditional markets.

The HYPE token has experienced a significant price decline, trading at $42.50 as of the filing announcement, down 11% in 24 hours and 27% over the past week. The token’s market capitalization stands at $11 billion, ranking it 21st among cryptocurrencies. Analysts attribute the drop to intensifying competition in the decentralized perpetual futures market, particularly from ASTER, a BNB Chain-based platform whose 24-hour trading volume has surged to $35.8 billion—more than triple Hyperliquid’s $10 billion. ASTER’s open interest ($1.15 billion) has also outpaced Hyperliquid’s ($2.2 billion), signaling a shift in trader preference. Technical indicators, including a broken rising wedge pattern and bearish momentum on the MACD, suggest further downside risks, with key support levels at $35–$32 identified as critical for a potential recovery.

The SEC’s regulatory environment remains a wildcard for crypto ETFs. While Bitwise’s filing highlights the absence of Hyperliquid futures contracts registered with the Commodity Futures Trading Commission, the agency has delayed action on multiple altcoin ETF proposals, including those from Canary, Grayscale, and VanEck. This regulatory uncertainty has contributed to market volatility, with HYPE’s price reacting sharply to news of the ETF filing—rising 4% immediately after the announcement before resuming its downward trend. The filing itself, however, underscores growing institutional confidence in Hyperliquid’s infrastructure, which is designed for high-speed perpetual futures trading and has executed billions in trades with minimal disruptions.

Hyperliquid’s tokenomics and governance structure are also under scrutiny. The platform’s buyback model, which allocates nearly all revenue to token repurchases, has been a key driver of HYPE’s recent performance. However, upcoming token unlocks, including 237.8 million HYPE vesting over 24 months starting November 29, could introduce additional selling pressure. Analysts estimate this unlock could inject $11.9 billion into the market over two years, potentially exacerbating the price decline if not offset by demand from the ETF or other institutional investors.

The Bitwise Hyperliquid ETF’s approval would mark a pivotal moment for DeFi token adoption. By offering a regulated, custodied exposure to HYPE, the fund could attract institutional capital and stabilize the token’s price trajectory. However, the success of the ETF will depend on the SEC’s evaluation of Hyperliquid’s compliance with securities laws and the broader market’s response to competition from platforms like ASTER. If approved, the fund could also pave the way for similar products, further blurring the lines between traditional finance and decentralized ecosystems.

Source: [1] Bitwise Hyperliquid Etf S-1 Registration of Securities September … (https://last10k.com/sec-filings/2088139/0001213900-25-091720.htm) [2] Bitwise Hyperliquid ETF files with the SEC (https://www.exchangetradedfunds.com/secnewslink.php?artic=70918&page=1) [3] Bitwise files prospectus for Hyperliquid ETF as SEC delays several ... (https://www.theblock.co/post/372472/bitwise-files-prospectus-hyperliquid-etf) [4] Hyperliquid Faces Growing Pressure as Bitwise Files ETF While ... (https://www.fxleaders.com/news/2025/09/26/hyperliquid-faces-growing-pressure-as-bitwise-files-etf-while-competition-intensifies/) [5] Bitwise Files for Hyperliquid HYPE ETF: Here is Everyhting You … (https://blocknews.com/bitwise-files-for-hyperliquid-hype-etf-here-is-everyhting-you-need-to-know/) [7] Here's what to expect from Hyperliquid with token … (https://www.fxstreet.com/cryptocurrencies/news/hyperliquid-price-forecast-hype-sharp-decline-eyes-40-as-upcoming-token-unlocks-sound-warning-202509221222) [8] HYPE Price Falls as CZ-Backed Aster Overtakes Hyperliquid (https://beincrypto.com/hype-price-falls-aster-overtakes-hyperliquid/) [9] HYPE Price Slides Amid Bitwise Hyperliquid ETF Filing (https://blockonomi.com/hype-price-slides-amid-bitwise-hyperliquid-etf-filing/)