Crypto asset manager Bitwise has filed an application to launch a spot ETF tracking the Hyperliquid (HYPE) token, a protocol specialized in perpetual futures and blockchain. This initiative comes at a time when crypto futures trading volumes are hitting all-time highs, amid growing competition among decentralized exchanges (DEXs) offering perpetual contracts.

Details of Bitwise’s Spot ETF Application for Hyperliquid

According to the regulatory filing, the Bitwise Hyperliquid ETF would be an exchange-traded fund that directly holds and tracks the HYPE token. This token is essential within the Hyperliquid ecosystem, providing fee discounts on its DEX and serving as a payment method for fees on its native blockchain.

Crypto ETFs have traditionally been tied to assets like Bitcoin or Ethereum, but Bitwise’s proposal marks a step toward products that reflect tokens from DeFi protocols and perpetual futures. However, key details such as the exchange listing, ticker, and applicable investor fees have yet to be disclosed.

The Rise of Perpetual Futures and DEX Competition

The crypto perpetual futures market has grown significantly, reaching record volumes. This growth has intensified competition between centralized and decentralized exchanges offering these contracts, which allow traders to keep positions open indefinitely as long as margin requirements are met.

Hyperliquid has positioned itself as a key player through its DEX specializing in perpetual futures, combining decentralization with advanced trading features. The HYPE token, beyond offering fee discounts and payments, stands out as an attractive asset for investors interested in this ecosystem.

Potential Impact on Bitcoin, Ethereum, and the Crypto Market

Bitwise’s entry into this segment could generate several effects on the crypto market:
• Diversification of crypto ETF products: Including tokens like HYPE expands the variety of assets available in regulated markets, beyond Bitcoin and Ethereum.
• Legitimization of DeFi tokens and DEXs: An ETF tracking a token tied to a perpetual futures DEX could boost institutional confidence in such protocols.
• Increased liquidity and demand: Launching the ETF could raise demand and liquidity for the HYPE token in both spot and futures markets.
• Competition for leading crypto assets: Diversification toward tokens with specific use cases could attract capital that traditionally flows into BTC and ETH.

Regulatory Aspects and Approval Challenges

Crypto-linked ETFs face intense regulatory scrutiny. The U.S. Securities and Exchange Commission (SEC) remains cautious in approving products involving digital assets, citing concerns about market manipulation, custody, and investor protection.

Within this framework, Bitwise’s application poses several key challenges:
• Secure custody of the HYPE token: Ensuring transparent and secure management of the underlying asset is critical.
• Sufficient transparency and liquidity: Regulators will demand evidence of volume and liquidity to prevent manipulation.
• KYC/AML compliance: Bitwise must demonstrate adherence to anti-money laundering and know-your-customer regulations, particularly given HYPE’s link to a DEX.

Final approval and operational details of the ETF remain pending confirmation by regulators.

Conclusion

Bitwise’s filing for a spot ETF tracking the Hyperliquid (HYPE) token represents a significant step in the evolution of crypto-linked financial products. In a context where perpetual futures and specialized DEXs are gaining traction, this initiative reflects the growing demand for diversified investment options beyond traditional assets like Bitcoin and Ethereum.

However, regulatory reception—particularly regarding custody and liquidity—will determine the ultimate success of this proposal. Either way, Bitwise’s move underscores the rising importance of DeFi protocols and futures platforms in the crypto ecosystem, as well as their potential to attract institutional capital.