VanEck Eyes First HYPE Spot-Staking ETF in U.S. and Europe

VanEck plans first HYPE spot-staking ETF, merging DeFi rewards with traditional finance access in U.S. and Europe.

In a new step, VanEck is preparing to launch a spot-staking exchange-traded fund (ETF) for the cryptocurrency token HYPE in the United States. At the same time, the company is also planning to introduce a similar exchange-traded product (ETP) in Europe. This move was revealed by sources talking to Blockworks.

VanEck to Use ETF Profits for HYPE Buybacks

To begin with, HYPE is the native token of Hyperliquid, a fast-growing and high-revenue Layer-1 blockchain. It has recently become popular in the crypto world for its good performance in the market. Therefore, VanEck believes that there is a great opportunity to transform HYPE into a financial product. Because it can be easily accessed by investors through traditional financial markets.

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VanEck already has ETFs for popular cryptocurrencies like Bitcoin and Ethereum. However, this will be the first time the firm is trying to build an ETF for a relatively new token such as HYPE. In fact, if approved, HYPE would become the youngest token to make its way into a VanEck ETF.

Furthermore, VanEck plans to use a portion of the profits made from the ETF to buy back HYPE tokens. This strategy is in line with Hyperliquid’s current strategy, where the platform uses almost all of its revenue on token buybacks. Such buybacks can cause a decrease in the supply of the token and potentially increase its market value over time.

In Europe, there are already products such as the 21Shares Hyperliquid ETP. Similarly, other areas are experimenting with staking-related financial products. For example, Canada has introduced spot Solana ETFs with staking rewards. Meanwhile, some Latin American firms include staking returns to cut investor fees. Even markets in Asia-Pacific are starting to explore spot crypto investments, albeit most of them do not offer complete staking benefits.

HYPE ETF Could Bridge DeFi and Traditional Finance

VanEck’s move is not only a matter of innovation – it is part of a worldwide trend. Investors worldwide are becoming more enthusiastic about combining staking income with the safety of more traditional financial products.

However, challenges remain. The U.S. Securities and Exchange Commission (SEC) has to approve the ETF anyway. Although VanEck has a strong record of filing early in crypto, including for Bitcoin and Ethereum, the SEC has been slow to embrace staking-based products. Transitioning from the traditional ETF to crypto staking ETFs require that regulators develop new guidelines.

Despite the regulatory uncertainty, VanEck thinks the time is right. Matt Maximo, senior investment analyst at VanEck, confirmed that Hyperliquid has been one of the main areas of interest for their liquid fund this year. Moreover, Kyle Dacruz, director of digital assets at VanEck has stated that there is clear investor demand for a HYPE staking ETF.

The addition of such an ETF could also aid HYPE in getting listed on major US exchanges such as Coinbase. Since it was launched in 2023, Hyperliquid has been sitting on top of the decentralized finance (DeFi) revenue charts for several weeks now. This momentum may be attractive to institutional as well as retail investors.

In conclusion, VanEck’s proposed ETF has the potential to be a turning point for crypto in traditional markets. By combining staking rewards with investor-friendly ETFs, VanEck is making it possible for more people to gain exposure to decentralized finance.