Bitwise’s Hyperliquid ETF, known by the ticker BHYP, has recently surpassed 1 million HYPE tokens. This remarkable achievement translates to total holdings exceeding $62 million, occurring just weeks after the fund commenced trading on NYSE Arca.
Among those holdings, approximately $55 million in tokens are staked, effectively generating yield from Hyperliquid’s protocol revenue. This unique staking ETF actually stakes its own tokens, providing a genuine investment experience.
The BHYP fund began trading on May 15, sporting a sponsor fee of 0.34%. However, Bitwise is waiving this fee for assets up to $500 million, enhancing its appeal. Investors benefit from 100% spot exposure to HYPE tokens, ensuring ownership of actual tokens rather than derivatives or futures-based instruments.
What sets BHYP apart from its competitors is its staking infrastructure, developed in-house by Bitwise Onchain Solutions. This framework ensures the staking process stays within Bitwise’s operational control, effectively minimizing counterparty risk which can arise from outsourcing asset management.
Bitwise’s management also runs its validators, ensuring direct oversight regarding slashing risk. This scenario arises when a misbehaving validator leads to penalties in the form of lost tokens. Staking rewards generated are returned to investors after fees are deducted.
The pace at which the fund has been acquiring HYPE tokens is impressive, with on-chain data indicating single-day purchases in the tens of millions.
#How Does Hyperliquid Operate?
Hyperliquid stands out as a proof-of-stake Layer 1 blockchain specifically designed for on-chain perpetual contracts. The mechanics of its staking model present significant advantages. Unlike many proof-of-stake networks that reward stakers through inflation—essentially creating new tokens for distribution—Hyperliquid directly allocates staking rewards from actual protocol revenue. In this model, fees paid by traders are redistributed to stakers, creating a sustainable income stream.
#Who Are the Competitors in the ETF Space?
Bitwise is not the only player in this growing market. Other firms, including 21Shares with its Hyperliquid product (THYP) and Grayscale with its HYPG fund, are also vying for attention. Collectively, US Hyperliquid ETFs saw over $117 million in inflows within just ten trading days after their respective launches.
Bitwise enjoys a unique position, as it is currently the only sponsor operating proprietary staking infrastructure, placing BHYP in a favorable position that competitors will find difficult to match swiftly. The initial fee of 0.34%, waived until $500 million in assets are reached, aims to accelerate asset accumulation during this formative phase.
For investors evaluating BHYP, the attraction is clear. It offers exposure to a rapidly expanding derivatives protocol along with staking income. This is all packaged within a regulated ETF structure. It eliminates the need to manage wallets, private keys, or validator nodes—making it a straightforward option for gaining exposure to this innovative space.