Asset manager Bitwise has filed to launch an exchange-traded fund that holds and tracks the token tied to the crypto perpetual futures protocol and blockchain Hyperliquid.
The company is bidding to launch the Bitwise Hyperliquid ETF, according to a regulatory filing on Thursday. It would directly hold Hyperliquid (HYPE), a token that gives discounts on its decentralized exchange (DEX) and is used to pay fees on its blockchain.
The filing doesn’t yet identify the exchange on which the product would trade, the ticker under which it would trade, or the fees Bitwise will charge.
Bitwise’s filing comes as competition between perpetual futures DEXs has been heating up after Aster launched a token earlier this month that has seen its trading volume and open interest surge past Hyperliquid, which has long held the top spot for onchain futures trading.
Hyperliquid ETF to offer in-kind redemptions
Bitwise’s filing said its HYPE ETF will directly hold the token and “seek to provide exposure to the value of Hyperliquid held by the Trust,” similar to the hugely popular Bitcoin (BTC) and Ether (ETH) ETFs launched last year.
The product will also offer in-kind creation and redemptions, allowing for shares in the fund to be exchanged for HYPE tokens instead of cash.
The Securities and Exchange Commission allowed in-kind creation and redemption for crypto products in July, which it billed as “less costly and more efficient.”
Filing is the first step before launch
Bitwise filing was a Form S-1 to register its ETF with the SEC under the Securities Act of 1933, the so-called “33 Act,” which allows its product to directly hold the crypto token.
The ETF will also need a Form 19b-4 to kickstart the approval process with the agency, which could take up to 240 days before it’s approved.
Related: Machi Big Brother exits $25M HYPE bet at $4M loss as rivals eat Hyperliquid market share
Earlier this month, the SEC approved generic listing standards for crypto ETFs to scrap the need to assess each product and speed up approvals, allowing shorter approval timelines if the underlying asset had been traded for six months on a Commodity Futures Trading Commission-regulated exchange.
However, Bitwise noted in its filing that “there are currently no Hyperliquid futures contracts registered with the CFTC.”
Aster open interest surges, triples Hyperliquid volume
Aster, a perpetual futures DEX native to the BNB Chain, has seen a recent surge in trading volume and open interest far above many of its rivals.
The exchange was a key driver of perpetual trading volumes on DEXs, hitting an all-time high of $70 billion on Thursday, with its volume over the last 24 hours surpassing $35.8 billion, more than tripling Hyperliquid’s $10 billion volume over the same period, per DefiLlama.
CoinGlass shows the open interest on the Aster (ASTER) token, outstanding contracts yet to be settled, hit $1.15 billion on Thursday, up from under $143 million just days earlier on Saturday, Sept. 20.
Meanwhile, open interest on the HYPE token is down 1.85% over the past day to $2.2 billion, with the token’s price having fallen 3.5% over that time to $42.5, per CoinGlass.
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