Bitwise Will Keep HYPE Tokens Earned From Its New ETF Rather Than Selling Them
Crypto asset manager Bitwise has announced it will hold HYPE tokens on its corporate balance sheet, using the management fees it collects from its newly launched Hyperliquid ETF as the source of accumulation, according to a report by The Block.
The announcement, reported by The Block on May 18, 2026, came just three days after Bitwise's spot Hyperliquid ETF (ticker: BHYP) began trading on the NYSE. Under the fund's structure, Bitwise charges investors a 0.34% annual sponsor fee, paid directly in HYPE tokens transferred from the fund to the firm. Instead of converting those tokens to cash for operating expenses, Bitwise says it will retain them as a corporate asset. The move signals a deliberate long-term holding decision by the same firm managing investor exposure to it.
How the Fee Mechanism Works
The BHYP ETF holds HYPE on a fully collateralised basis on behalf of investors. The sponsor fee is paid in-kind: HYPE tokens move from the fund's wallet to Bitwise's wallet at regular intervals. According to the fund's prospectus, each share's HYPE backing will gradually decrease over the life of the fund as those transfers occur.
Separately, Bitwise stakes roughly 70% of the fund's HYPE holdings and keeps 15% of the staking rewards generated, with the remaining 85% reinvested back into the fund for investors. The base staking yield runs at approximately 2.2%.
The fee is waived entirely for the first month on the initial $500 million in fund assets, a promotional rate common at ETF launch. Anchorage Digital Bank serves as custodian, and the staking infrastructure runs through Bitwise Onchain Solutions. While 21Shares' THYP became the first US-listed Hyperliquid ETF when it launched on Nasdaq on May 12, BHYP is the first to offer in-house staking.
Why Hyperliquid's Fee Numbers Matter Here
The strategic logic of holding HYPE rather than selling it becomes clearer when examined against Hyperliquid's on-chain performance. The protocol generated approximately $13.83 million in fees over the seven days ending May 18, according to DefiLlama data as of that date.
That figure represents roughly 43% of total weekly blockchain fee revenue globally, ahead of Ethereum (about $3 million, or 13%) and Solana (about $2 million, or 10%) combined.
Those fees are driven primarily by perpetual futures trading.
Perpetual futures, or perps, are derivative contracts with no expiry date that allow traders to take leveraged positions on asset prices. Hyperliquid holds approximately 70% of all on-chain perp volume globally, a figure that reflects its dominance among decentralised venues but does not include the larger centralised exchange market. The protocol processed $170.78 billion in perp trades over the past 30 days and $625.3 billion across the first quarter of 2026. Total value locked in the protocol stands at $5.12 billion.
HYPE's token burn mechanism directs 97% of protocol fee revenue toward buying back and permanently removing HYPE from circulation. Analysts have described this as creating sustained deflationary pressure on supply.
Speaking at the ETF launch on May 15, three days before the balance sheet announcement, Bitwise Chief Investment Officer Matt Hougan described the platform's trajectory in the firm's launch materials: "Hyperliquid has emerged as one of the most compelling investment opportunities in crypto today. This has translated into historically strong returns. We think it's one of the most exciting assets in crypto."
A Treasury Playbook With a Different Funding Source
The approach draws comparisons to Strategy (formerly MicroStrategy), which holds 738,731 BTC on its corporate balance sheet as of March 2026.
But there is a structural difference worth noting. Strategy has funded most of its Bitcoin accumulation through equity issuance and debt. Bitwise's HYPE accumulation is funded organically through product revenue, meaning the firm builds its position without additional capital raises. No other US-registered ETF issuer is known to have publicly committed to redirecting fee revenue into the same asset it manages.
HYPE was trading between $43 and $46 at the time of the announcement, with a market capitalisation of approximately $10.8 billion (roughly 13th globally, or 9th excluding stablecoins). The token's all-time high of $59.37 was reached in September 2025, leaving it about 23% below that peak. It gained 8.6% in the prior seven days against a broader total crypto market cap decline of 6.5%.
Access Gap for Regional Traders
For traders across South Asia and sub-Saharan Africa, the BHYP ETF itself is out of reach without access to a US brokerage account. However, Hyperliquid's platform operates without KYC requirements and is accessible in approximately 190 countries, including India, Nigeria, Kenya, Pakistan, Bangladesh, and South Africa. The platform restricts only the United States, Ontario, Canada, and sanctioned jurisdictions including Cuba, Iran, North Korea, Syria, and occupied Ukrainian territories.
This creates a two-tier situation. Regional retail traders can access the protocol and hold HYPE directly. They cannot buy the regulated ETF wrapper. In theory, any demand and price appreciation driven partly by institutional ETF flows would benefit HYPE holders regardless of how they gained exposure.
For Indian traders specifically, the accessibility of Hyperliquid's perp markets carries added significance. Derivatives trading already dwarfs cash equity volumes on India's domestic exchanges, and platforms such as Giottus and WazirX have begun adding crypto perpetuals, reflecting growing domestic appetite for the product type that Hyperliquid specialises in.
Traders in Pakistan and Bangladesh can also access the platform, though both countries operate in regulatory grey zones with respect to crypto derivatives. Users in those markets bear full compliance responsibility under local law and should verify their obligations before trading.
Bitwise's announcement adds weight to that scenario by signalling that a firm managing more than $11 billion in assets as of April 1, 2026 views HYPE as a long-term hold rather than incidental fee income.
Developers in these regions have access to HyperEVM, Hyperliquid's EVM-compatible execution layer, which allows teams to build applications on the same chain currently generating more weekly fee revenue than any other public blockchain.
What Comes Next
BHYP and its rival 21Shares product THYP have together attracted approximately $8.2 million in combined net inflows since THYP's launch on May 12.
Those figures are modest relative to the early days of the Bitcoin and Ethereum spot ETFs, but the product category is new. How quickly inflows grow will directly affect the size of Bitwise's fee-driven HYPE accumulation. Bitwise had not publicly disclosed a target allocation or timeline for how long it intends to hold the tokens it receives as of the time of reporting.
The competitive dynamics shaping the product have already been consequential. Bitwise filed an initial S-1 registration for BHYP in September 2025 and submitted a revised filing in April 2026 carrying a proposed fee of 0.67%. By launch, that figure had been cut to 0.34%, a revision that reflects the competitive pressure applied by 21Shares as both firms raced to bring a US-listed Hyperliquid ETF to market. Whether fee compression continues as the category matures will shape how much HYPE Bitwise accumulates over time.