HYPE Price Stays Steady Despite Bitwise Filing for Hyperliquid ETF

Summary:
The price of Hyperliquid's token (HYPE) has remained stagnant, continuing its downward trend, despite Bitwise's recent submission for a spot ETF that would hold this cryptocurrency.

Key Takeaways

HYPE's price remains flat despite Bitwise's ETF filing.
Bitwise has filed for a spot ETF that directly holds HYPE tokens.
New listing standards by the SEC may expedite ETF approvals, but HYPE doesn't currently meet those criteria.
HYPE has been trending downwards since its all-time high, facing various market pressures.

HYPE price flat even as Bitwise files for spot Hyperliquid ETF - 1

Bitwise Files for Hyperliquid ETF

The price of HYPE has shown no significant movement, staying flat while continuing its multi-week downtrend. This comes even after prominent investment firm Bitwise made headlines by filing for the first spot exchange-traded fund (ETF) dedicated to Hyperliquid's token.

On September 25, Bitwise submitted a Form S-1 application to the U.S. Securities and Exchange Commission (SEC) as part of the Securities Act of 1933, detailing plans for the Bitwise Hyperliquid ETF.

According to the filing, the ETF aims to directly hold the Hyperliquid (HYPE) token, which serves as the native cryptocurrency for the Hyperliquid decentralized exchange. This structure allows Wall Street investors to gain direct exposure to HYPE's market value without requiring self-custody or interaction with the blockchain's underlying framework.

Additionally, the ETF will permit in-kind creations and redemptions. This means that instead of receiving cash, fund shares can be exchanged for HYPE tokens — a recent regulatory change intended to lower friction and operational costs for cryptocurrency products.

Next Steps for Bitwise

Following this filing, Bitwise needs to submit Form 19b-4, marking the official start of the SEC's review process that will decide if the ETF can be listed on a national securities exchange.

At this time, Bitwise has not confirmed which exchange will list the ETF, the ticker symbol it will trade under, or the expected management fees for investors.

Once these steps are concluded, the SEC will have 240 days to review the application after acknowledging the filing.

Recently, the SEC introduced new generic listing standards for spot cryptocurrency ETFs, allowing some products to bypass thorough sign-off if they meet certain conditions. Under the updated criteria, an ETF could advance towards listing in just 75 days if its underlying asset has active futures contracts regulated by the Commodity Futures Trading Commission (CFTC) for at least six months, trades on a market with surveillance-sharing arrangements, or constitutes at least 40% of an already-listed ETF.

Challenges Ahead

However, Bitwise noted in its filing that HYPE does not currently meet these guidelines, as there are no Hyperliquid futures contracts registered with the CFTC.

Typically, ETF filings can positively impact an asset's price by creating new demand and increasing institutional attention. Nevertheless, HYPE has not experienced any turbulence, with its price trading sideways in a narrow range between $40.11 and $43.46.

Since reaching its all-time high of $59.30 on September 18, Hyperliquid has been caught in a downward trend. Factors contributing to this include profit-taking by initial investors, increased competition from other protocols, and worries over an upcoming token unlock. These dynamics have outweighed any potential excitement generated by the Bitwise ETF filing.

As of the latest updates, HYPE is down almost 1% in the last 24 hours, trading at $42.41 after partially recovering its earlier losses. Over the past week, HYPE has seen losses exceed 25%.

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