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Bitwise BHYP Hyperliquid ETF: The SEC Registration Path and Strategic Reference for the First DeFi Protocol Spot ETF

Posted on by Tony
Bitwise BHYP Hyperliquid ETF: The SEC Registration Path and Strategic Reference for the First DeFi Protocol Spot ETF
20
June

Core Summary

  • On April 8, 2026, Bitwise filed a report with the U.S. Securities and Exchange Commission (SEC). BHYPThe Bitwise Hyperliquid ETF has filed its second revised S-1 registration statement, becoming the world's first spot ETF application with HYPE, the native token of a DeFi protocol, as its underlying asset.
  • Product structure includes On-chain staking yieldStaking rewards, as a component of the fund's value, differ from the purely passive holding model of standard spot ETFs, thus creating a new dimension for the SEC's investor protection review.
  • Competitor 21Shares THYP It was the first to list on the NYSE in May 2026, with a net inflow of $1.2 million and a trading volume of $1.8 million on its first day; similar products from Grayscale and VanEck are awaiting approval.
  • The Hyperliquid network already accounts for approximately [a significant portion] of the global on-chain derivatives open interest. 60 %(May 2026) USDC supply exceeded $5 billion, with Coinbase serving as the official USDC vault deployer.
  • Key impact on licensed institutions in the Asia-Pacific region: The first DeFi protocol token to be registered with the SEC and listed on a traditional exchange marks a significant milestone.On-chain native assets → regulated financial productsThe compliance channel is now operational.
📑 Table of Contents
  1. Product Structure Analysis — BHYP's ETF structure, fees, and staking mechanism
  2. SEC Registration Process and Regulatory Challenges — Timeline from the first S-1 to the second revision
  3. 竞争格局 — 21Shares THYP, Grayscale, VanEck Three-Way Competition
  4. Transmission effect on the Asia-Pacific licensing ecosystem — Opportunities for licensed institutions following the approval of DeFi protocol ETFs

This article was originally written by the Aiying Compliance Team and requires authorization to be reproduced.

In May 2026, US-based crypto asset management firm Bitwise Asset Management officially launched the Bitwise Hyperliquid ETF (trading code: [code]). BHYPThis marks the world's first US-listed spot ETF with HYPE, the native token of a DeFi protocol, as its underlying asset. The product not only provides direct exposure to the HYPE token but also incorporates on-chain staking yields into the fund's value composition—a structure unprecedented in ETF history and serving as a significant reference for the SEC's product approval framework and the product strategies of licensed institutions in the Asia-Pacific region.

I. Product Structure: BHYP's ETF Structure and Collateralization Mechanism

According to Bitwise's second amended registration statement filed with the SEC (AInvest, 2026-04-13BHYP adoptsTrust-type spot ETFThe structure is a grantor trust, with the underlying asset being HYPE tokens held by a qualified custodian.

Regarding product fee rates, the management fee disclosed in the earlier S-1 filing was... 0.67 %(67 basis points), significantly higher than Bitwise's Bitcoin ETF (BITB, 0.20%) and Ethereum ETF (ETHW, 0.24%), reflecting the higher operational complexity of DeFi protocol tokens in terms of custody and market structure. However, according to a Cointelegraph report in May (Cointelegraph, 2026-05-15The final listing fee rate has been reduced to 0.34 %Furthermore, the first month's management fees are waived for the first $5 million in assets—a highly competitive pricing strategy that indicates Bitwise's desire to quickly capture market share in the HYPE ETF market.

The pledging mechanism is the core difference between BHYP and standard spot ETFs. The fund pledges a "significant proportion" of its HYPE holdings through [the pledging mechanism]. Bitwise's self-operated staking department On-chain staking allows investors to earn HYPE staking rewards without having to manage their private keys or bear the risks of on-chain operations. However, this also raises new investor protection questions for the SEC: How should the risk of slashing associated with staking be disclosed? How should the tax characterization of staking rewards be handled?

II. SEC Registration Process and Regulatory Challenges

Bitwise first filed its S-1 registration statement in September 2025, and filed a second revised version on April 8, 2026.CryptoNewsInsights, 2026-05-12(This includes adding the trading code BHYP, a complete fee structure, and a description of the staking mechanism.) Bloomberg ETF Analyst Eric Balchunas It was noted that "the addition of specific transaction codes and fee structures in S-1 amendments usually means that listing is just weeks away."

The SEC's review of BHYP focuses on the following dimensions:

  • Market manipulation preventionAs a relatively new crypto asset, does HYPE's spot market liquidity and price discovery mechanism meet the SEC's "fully transparent market" requirement for the underlying assets of ETFs?
  • Custody ArrangementsDo the compliant custody schemes for DeFi protocol tokens—particularly the changes in the custody status of tokens during staking operations—meet the asset segregation requirements of the Investment Company Act of 1940?
  • Disclosure of Pledge RisksHYPE staking involves the risk of slashing by validator nodes, and the ETF prospectus must fully disclose this type of on-chain-specific risk.

It's worth noting that Bitwise had previously achieved a breakthrough in Europe: its physically backed HYPE staking products have already been... Deutsche Börse Xetra Platform listing (SpazioCrypto, 2026-04-11This cross-jurisdictional experience may provide some compliance reference for SEC approval.

III. Competitive Landscape: A Three-Way Competition Among 21Shares, Grayscale, and VanEck

BHYP is not an isolated case. In the same week of May 2026, 21Shares was the first to launch on the NYSE. THYP Hyperliquid Foundation (Cointelegraph, 2026-05-15On its first day, the stock saw a net inflow of $120 million and a trading volume of $180 million. Similar products from Grayscale Investments and VanEck are also awaiting SEC approval.

Institutional investments in the Hyperliquid ecosystem extend beyond ETF products:

  • a16zOver the past month, venture capital firms have cumulatively purchased approximately $6,700 million worth of HYPE and pledged approximately $5,100 million, reflecting their long-term allocation strategy for DeFi protocol tokens.
  • Coinbase:: Serves as the official vault deployer of USDC on the Hyperliquid network, where the USDC supply has exceeded $50 billion.
  • Hyperliquid network dataIt processed approximately $2.9 trillion in transactions in 2025 and accounted for about 60% of the global on-chain derivatives open interest in May 2026 (Source: DeFiLlama).

HYPE token market capitalization is approximately $ 112.2 millionAccording to CoinMarketCap, it ranks 10th in global cryptocurrency market capitalization.

IV. Transmission Effect on the Asia-Pacific Licensing Ecosystem

The successive launches of BHYP and THYP signify that…DeFi protocol tokens → SEC-registered ETFs → Trading on traditional stock exchanges"This compliance pathway has been substantially opened. For Asia-Pacific asset management institutions holding licenses such as Hong Kong SFC Type 9 (Asset Management), Singapore CMS Fund Management, and Australia AFSL, this provides the following strategic reference:"

  • Expanded space for product design innovationIf the SEC approves ETF structures with collateralized returns, Asia-Pacific regulators (such as the SFC and MAS) may follow suit, providing a compliance pathway for local licensed institutions to launch similar "collateralized" crypto asset funds.
  • The "compliance premium" of DeFi protocol tokensFollowing HYPE's achievement of becoming the first DeFi native token to be registered with the SEC as an ETF, it is expected to drive more DeFi protocols to proactively seek compliance frameworks to attract institutional capital inflows—which means incremental business for licensed custodians and fund managers.
  • Upgraded demand for managed infrastructureThe custody of DeFi protocol tokens (especially asset segregation under staking) poses new requirements for the technical capabilities and compliance frameworks of licensed custodian banks in the Asia-Pacific region.
  • Cross-jurisdictional issuance strategy windowBitwise's "Europe first (Xetra) + US follow-up (SEC)" approach suggests that licensed institutions in the Asia-Pacific region can use Hong Kong/Singapore as the first launch market for innovative DeFi products, establishing a first-mover advantage before expanding to the US and Europe.

FAQ

Is BHYP an ETF or an ETP? What are the key differences between it and a standard Bitcoin spot ETF?

BHYP belongs to the SEC's registration structure. Trust-type spot ETF(Grantor Trust), belonging to the same legal framework as existing Bitcoin spot ETFs (such as IBIT and FBTC). The core differences lie in two points: first, the underlying asset is the DeFi protocol token BHYPE, rather than Bitcoin/Ethereum, resulting in different market maturity and liquidity depth; second, BHYP will... On-chain staking yield Including it in the fund's value composition means that the fund's net asset value depends not only on the HYPE price, but also on the collateral yield and the performance of the verification node—a "proactive return" feature that standard spot ETFs do not possess, and a core focus of the SEC's approval process.

Can licensed fund companies in the Asia-Pacific region launch similar products locally?

It depends on the specific jurisdiction. Hong Kong's SFC approved virtual asset spot ETFs in 2024, but it hasn't yet covered composite products with staking returns. Under Singapore's MAS CIS Code framework, crypto asset funds require case-by-case approval, and the tax characterization of staking returns (capital gains vs. operating income) is a key unresolved issue. Japan's FSA currently only allows investment products in the form of crypto asset trust beneficial rights. Overall, the SEC's approval of BHYP—particularly regarding the disclosure requirements for staking risks and returns—will provide an important reference template for regulators in the Asia-Pacific region.

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Tony

Tony is a founding partner at Aiying Compliance, specializing in crypto asset regulation, securities law, and cross-border licensing across Hong Kong, Singapore, and key APAC jurisdictions. With deep expertise in virtual asset service provider (VASP) frameworks, custody licensing, and RWA tokenization, he advises financial institutions navigating the evolving digital asset regulatory landscape.

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