HYPE rallies as Bitwise unveils Hyperliquid ETF amid oversight push

Bitwise launched its spot Hyperliquid ETF, BHYP, on Friday, becoming one of the first firms to provide regulated US exposure to HYPE.

The exchange-traded fund (ETF) will offer investors direct spot exposure to HYPE while incorporating staking functionality through Bitwise's in-house staking arm, Bitwise Onchain Solutions.

BHYP introduces staking rewards for HYPE investors

According to the firm, the fund's Hyperliquid holdings will be staked to generate additional yield opportunities alongside exposure to the underlying token's market performance.

Bitwise CIO Matt Hougan stated that Hyperliquid has become one of the most compelling investment opportunities in the crypto market, pointing to the platform's growing role in global price discovery during periods of market volatility.

He noted that during a spike in geopolitical tensions earlier this year, when traditional financial markets were closed, traders turned to Hyperliquid's markets for real-time pricing activity.

"BHYP is designed to give investors convenient exposure to that potential, with the added benefit of in-house staking to seek to maximize returns," Hougan said in a Friday statement.

He added that Hyperliquid's ecosystem structure aligns incentives between token holders and platform growth. This makes the asset increasingly attractive to institutional and retail investors seeking exposure through regulated products.

BHYP began trading on the New York Stock Exchange (NYSE) with a sponsor fee of 0.34%, although Bitwise said the fee will be waived for the first month on the fund's initial $500 million in assets.

The ETF debut comes as traditional financial institutions intensify calls for tighter oversight of Hyperliquid and offshore crypto trading venues.

CME Group and Intercontinental Exchange (ICE), parent company of the NYSE, have reportedly urged US regulators and lawmakers to introduce stronger oversight of Hyperliquid, citing concerns tied to market manipulation risks and the platform's growing influence on global commodity markets, according to Bloomberg.

The concerns primarily focus on Hyperliquid's anonymous trading structure, which critics argue could create opportunities for insider activity, market abuse or sanctions evasion by state-linked actors.

The pressure from financial institutions highlights increasing tensions between decentralized exchanges and Wall Street trading powerhouses.

HYPE is trading at $44, up 1.2% over the past 24 hours, while the rest of the top 50 cryptocurrencies post losses.