Key Highlights
- Bitwise will use 10% of its BHYP ETF management fees to buy and hold Hyperliquid (HYPE) on its own balance sheet.
- The Hyperliquid network uses about 99% of its revenue to buy back and burn HYPE, reducing supply and linking usage to token value.
- Bitwise said the ETF carries significant risk and that investors could lose part or all of their investment.
Bitwise Asset Management has announced that it will allocate 10% of the management fees generated by its newly launched Bitwise Hyperliquid ETF (BHYP) to purchasing and holding HYPE, the native token of the Hyperliquid network, on its corporate balance sheet.
In an X post on Monday, the team wrote, “In that spirit, we’re pleased to announce that Bitwise will be devoting 10% of the Bitwise Hyperliquid ETF ($BHYP) management fee to holding HYPE on the Bitwise balance sheet.”
Why Bitwise is buying HYPE
The company said that Hyperliquid is different from most blockchains because about 99% of its revenue is used to buy back and burn HYPE tokens.
Bitwise briefly explained this idea in simple terms, saying the system is built on a “community-first model” where the success of the protocol also benefits people who hold the token. As a result, this has prompted the company to also hold HYPE, indicating that it is not just offering exposure through the ETF but also keeping some tokens itself.
How the BHYP ETF works
The Bitwise Hyperliquid ETF started trading on the New York Stock Exchange on May 15. The fund is designed to give investors a simple way to get exposure to Hyperliquid without needing to directly buy the token or manage wallets. Instead of handling crypto directly, investors can just buy shares of the ETF, and the fund handles the rest.
The ETF also includes staking, which means some of the tokens held by the fund are locked into the Hyperliquid network using Bitwise Onchain Solutions. When tokens are staked, they help support the network, and in return, they can earn rewards. These rewards go back into the ETF, which can help the fund grow over time.
In addition, the ETF carries a sponsor fee of 0.34%. However, the company said this fee will be 0% for the first month on the first $500 million in assets. This means early investors are not paying fees at the start, which can help attract more money into the fund during its early stage.
Bitwise warns of high risk
Bitwise itself confirmed that the BHYP ETF is not safe for all investors. The firm said it carried a high degree of volatility, and there are possibilities that investors could lose part or even all of their money. It also said the ETF does not follow the same protection rules as normal investment funds like traditional ETFs or mutual funds.
Because of this, investors should understand that the safety level is lower compared to regular financial products. Aside from Bitwise, 21Shares has also launched its own Hyperliquid-related ETF called THYP on Nasdaq.
It has also introduced a 2x leveraged HYPE ETF. This shows that more firms are now trying to offer regulated ways for investors to access the Hyperliquid ecosystem.
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