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Hyperliquid’s native token HYPE failed to break its multi week slide even after Bitwise submitted an application for the first Spot Hyperliquid ETF a move that typically sparks bullish momentum.
On Sept. 25, Bitwise filed a Form S-1 with the U.S. Securities and Exchange Commission under the Securities Act of 1933 outlining plans for the Bitwise Spot Hyperliquid ETF. According to the filing, the fund would directly hold HYPE tokens giving Wall Street investors straightforward exposure without requiring self custody or interaction with blockchain infrastructure.
The Spot Hyperliquid ETF will also feature in kind creations and redemptions meaning investors can exchange shares of the fund directly for HYPE tokens instead of cash. This mechanism recently approved for crypto products is designed to reduce friction and operational costs.
As part of the regulatory process, Bitwise must now submit Form 19b-4 to formally initiate the SEC’s review. Once acknowledged, the commission has up to 240 days to render a decision.
However, under the new streamlined guidelines for crypto products, some ETFs can list within 75 days if they meet specific conditions. The Spot Hyperliquid ETF filing notes that HYPE currently fails those criteria since no Hyperliquid futures are registered with the CFTC.
Bitwise has yet to reveal the exchange listing, ticker symbol, or management fees for the Spot Hyperliquid ETF but analysts suggest such details could be key in gauging investor appetite.
Historically, ETF filings bring institutional visibility and price lift for the underlying asset. But the Spot Hyperliquid ETF announcement failed to inspire momentum for HYPE which traded sideways between $40.11 and $43.46.
Since peaking at $59.30 on Sept. 18, Hyperliquid has lost more than 25% amid heavy profit taking, rising competition from rival protocols and concerns about upcoming token unlocks. These bearish forces outweighed optimism around the Spot Hyperliquid ETF filing.
At press time, HYPE slipped nearly 1% in 24 hours to $42.41 partially recovering intraday losses but extending its steep weekly decline.
The muted market reaction highlights that while the Spot Hyperliquid ETF may eventually broaden institutional access, near term headwinds remain dominant for Hyperliquid’s token.
