Hyperliquid ETFs Pull in Nearly $160 Million as Bitcoin Selloff Deepens

Spot exchange-traded funds tracking the HYPE token drew close to $160 million in assets within days of their launch, even as bitcoin and ether tumbled and their corresponding ETF products shed significant value — underscoring an emerging divergence in investor appetite across the crypto market.

Bitwise and 21shares launched their respective HYPE spot ETFs in May, trading under the tickers BHYP and THYP. As of Friday, 21shares' product held $75.8 million in assets under management, while the Bitwise fund carried $71.14 million. Grayscale followed with its own Grayscale Hyperliquid Staking ETF, ticker HYPG, launching Wednesday, with $4.5 million in assets at the close of the week.

The inflows arrive at an awkward moment for the broader crypto market. The iShares Bitcoin Trust ETF (IBIT) ended the week down roughly 16%, reflecting a steep selloff in bitcoin prices.

Hyperliquid is a decentralized perpetual futures exchange built on its own blockchain. It operates around the clock for traders outside the United States, and first gained wide attention last summer when the U.S.-Iran war sent traders seeking weekend access to oil markets. Volume in crude oil alone quickly reached roughly $1 billion a day on the platform, according to Stephen Coltman, 21shares vice president and head of macro.

ETF experts and fund managers point to the platform's revenue model as a key draw. Unlike most crypto tokens, which have an indirect relationship to the activity on their underlying platform, hyperliquid routes 99% of trading fees directly into buybacks of the HYPE token.

"In the case of hyperliquid, 99% of the fees generated on the platform go towards buying back HYPE, the asset," said Matt Hougan, Bitwise chief investment officer. "There is this very tight loop between the activity taking place in crypto and the value of the hyperliquid asset," Hougan said.

Coltman drew a parallel to conventional equity markets. "It's very similar to a stock buyback, where all of the trading is generated and used to buy back the token," he said.

Zach Pandl, Grayscale head of research, said the fund is pulling in a different type of investor than bitcoin typically attracts. "Hyperliquid is bringing new investors from outside of the crypto ecosystem into this particular digital asset," Pandl said.

Nate Geraci, president of NovaDius Wealth Management, flagged the consistent positive net inflow days as noteworthy, particularly amid the broader crypto downturn. "I view spot crypto ETFs as an important bridge between TradFi and DeFi," Geraci wrote. "While it is difficult to determine the degree of overlap between HYPE ETF investors and hyperliquid users, the ETFs undoubtedly increase awareness of the platform."

Hougan characterized the market penetration as minimal. "This is a market that's 1% penetrated into its potential market. Most people still don't know what hyperliquid is," he told reporters.

The three ETFs carry slightly different fee structures: Grayscale charges a 0.29% expense ratio, 21shares 0.30%, and Bitwise 0.34%. Bitwise, meanwhile, cites strong relationships with family offices as a competitive differentiator.

The hyperliquid platform itself remains inaccessible to U.S. users. Pandl said he expects regulatory clarity sufficient for U.S. access by 2027, calling it "a reasonable timeline for when we could have sufficient regulatory clarity around decentralized exchanges that U.S. users could begin to access the platform."

Geraci cautioned that broader adoption is far from assured. "Hyperliquid's greatest challenge may be rising competition from both TradFi and DeFi, a dynamic that a more favorable regulatory environment could intensify," he wrote. Whether the current inflow momentum persists — or simply reflects early novelty — will likely depend on how quickly awareness expands beyond the narrow slice of investors who have discovered the platform so far.

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