Amidst a weakening of Bitcoin and Ethereum and outflows from related spot ETFs, ETFs tracking Hyperliquid have bucked the trend and attracted inflows. CNBC reports that recently launched products from Bitwise, 21Shares, and Grayscale have collectively attracted nearly $160 million in inflows within a short period after listing.
New products attract funds against the trend
In May, Bitwise and 21Shares launched spot ETFs tracking the HYPE index, codenamed BHYP and THYP, respectively. Reports cite data showing that the two products have accumulated nearly $150 million in assets and have recorded net inflows on most trading days since their launch. Grayscale also launched its Hyperliquid Staking ETF this Wednesday, codenamed HYPG.
This contrasts with the performance of mainstream crypto ETFs. The report noted that during the sharp decline in Bitcoin prices, spot Bitcoin ETFs experienced continuous outflows, with BlackRock's IBIT falling by approximately 16% that week.
The market values the repurchase model
Hyperliquid is a decentralized perpetual contract trading platform running on its own blockchain, primarily targeting 24-hour traders outside the United States. Many interviewees believe that the key reason for the attention garnered by this type of ETF is that HYPE's value capture method is more easily understood by traditional investors.
Bitwise Chief Investment Officer Matt Hougan stated that 99% of the fees generated by the Hyperliquid platform will be used to buy back HYPE tokens, creating a more direct link between platform trading activity and token value. Stephen Coltman, Head of Macro at 21Shares, likened this to a publicly traded company using cash to buy back its shares.
TradFi funds are starting to pay attention.
Zach Pandl, head of research at Grayscale, believes that these products may not necessarily attract existing crypto funds transferred from Bitcoin, but rather new investors entering this niche market for the first time. Nate Geraci also stated that spot crypto ETFs are becoming an important bridge between traditional finance and decentralized finance, and the HYPE ETF has at least increased market awareness of the Hyperliquid platform itself.
The report also mentioned that Hyperliquid gained more attention last summer due to weekend oil trading demand driven by geopolitical conflicts. 21Shares stated that at that time, the platform's oil-related trading volume alone quickly rose to approximately $1 billion per day.
However, interviewees also cautioned that Hyperliquid currently enjoys limited market awareness and will face competition from traditional financial platforms and other DeFi protocols in the future. This competition may intensify further as the regulatory environment changes.
