While Crypto Sinks, HYPE Is Soaring. Now It Has Two ETFs
Crypto is mired in a bear market of sorts, with bitcoin and ether down 40% and 60% from their highs.
For crypto bulls it stings more than that, because crypto has been dead money this year while other assets, AI-related stocks especially, have ripped higher.
But one token is bucking the trend. HYPE, the native token of the Hyperliquid blockchain, recently hit an all-time high and is up roughly 160% since the start of the year. Two ETFs tied to it launched this month and already hold a combined $122 million.
The Bitwise Hyperliquid ETF (BHYP) charges a 0.34% expense ratio, and the 21Shares Hyperliquid ETF (THYP) charges 0.30%.
With a $17 billion market cap, HYPE is the ninth-most valuable crypto asset, according to CoinMarketCap. Its fully diluted market cap is $63 billion, which would push it into the top five excluding stablecoins, and above Solana (SOL), worth $52 billion.
What is Hyperliquid?
Hyperliquid is a blockchain built for decentralized finance, and its first big use case was perpetual futures.
It has since broadened into spot trading, lending and borrowing, and prediction markets. One of its most noteworthy expansions has been pre-IPO perpetuals, which let traders take positions on private companies before they ever reach the public market.
Contracts on hot private companies like SpaceX and Anthropic have been especially popular with traders.
Like Ethereum and Solana, Hyperliquid is a proof-of-stake blockchain, which means the network is secured by validators who lock up HYPE and process transactions in exchange for rewards.
ETFs that hold HYPE can participate in the process, generating yield for their investors.
BHYP currently stakes about 70% of its assets and reports a net staking rewards rate of 1.2%, according to the issuer’s website. THYP stakes roughly 66% at a net rate of 0.49%.
The Bull Case
The bull case for HYPE rests on continued growth of the platform itself. But it’s not just that. The system has been designed so that the growth accrues to token holders.
When users transact on the Hyperliquid blockchain, the protocol collects fees. Roughly 97% of those fees flow into what’s called the Assistance Fund, which uses them to buy HYPE on the open market continuously and pull those tokens out of circulation.
The fund has cumulatively bought back more than $1 billion worth of HYPE so far. The mechanism ties the token directly to platform activity, so more trading means more fees means more buying pressure on HYPE.
That design is an answer to a long-running knock against Ethereum and, to a lesser extent, Solana, where the complaint has been that growth in network usage doesn’t reliably show up as value for token holders.
