HYPE price remained flat and failed to reverse its multi-week downtrend, even as prominent asset manager BitWise filed for the first spot exchange-traded fund that holds and tracks Hyperliquid’s token.
Summary
- HYPE price remained in a multi-week downtrend even as Bitiwse filed for a Hyperliquid ETF.
- Bitwise’s HYPE ETF does not qualify for accelerated approval under the SEC’s new generic listing standards.
On Sep. 25, Bitwise submitted a Form S-1 to the U.S. Securities and Exchange Commission under the Securities Act of 1933, where it outlined plans for the Bitwise Hyperliquid ETF.
According to the filing, the fund will directly hold the Hyperliquid (HYPE) token, which functions as the native cryptocurrency for the decentralized exchange, and thereby offer Wall Street investors direct exposure to the token’s market value without the need to self-custody or interact with the underlying blockchain infrastructure.
The ETF will also allow for in-kind creations and redemptions, meaning shares of the fund can be exchanged for HYPE tokens instead of cash, an option that was recently approved for crypto products to reduce friction and operational costs.
As for the next step, Bitwise will have to submit Form 19b-4, which will formally initiate the SEC’s review process and determine whether the ETF can be listed on a national securities exchange.
Bitwise has yet to disclose the exchange on which the ETF would be listed, the ticker it would trade under, or the management fees investors can expect to pay.
Once these preliminary steps have been completed, the commission’s review period begins once it acknowledges the filing, which could extend up to 240 days.
Just last week, the SEC approved new generic listing standards for spot crypto ETFs, allowing certain products to bypass direct sign-off if they meet specific criteria. Under the revised guidelines, an ETF may proceed to listing within just 75 days, provided its underlying asset has active futures contracts regulated by the Commodity Futures Trading Commission for at least six months, trades on a market with surveillance-sharing agreements, or already comprises at least 40% of an existing listed ETF.
Bitwise, however, acknowledged in its filing that HYPE does not meet those criteria, stating that “there are currently no Hyperliquid futures contracts registered with the CFTC.”
ETF filings typically bode well for an asset’s price performance as they open up new avenues for demand and also bring in greater institutional visibility. However, HYPE saw little movement, as it moved sideways within a tight range between $40.11 – $43.46.
Hyperliquid has been on a downtrend since hitting an all-time high of $59.30 on Sep. 18. A confluence of bearish catalysts, including profit-taking by early holders, heightened competition from rival protocols, and concerns around an upcoming token unlock, seems to have undercut any enthusiasm that the Bitwise ETF filing might have generated.
At press time, Hyperliquid (HYPE) was down almost 1% in the past 24 hours at $42.41, after managing to recover some of the day’s losses. On the weekly time frame, losses extend to over 25%.
