Bitwise drops Polkadot and Avalanche from flagship crypto ETF, raising questions about Hyperliquid’s staying power
The fund manager's quarterly rebalance swaps two OG layer-1 tokens for Hyperliquid and Stellar, but looming token unlocks could shuffle the deck again soon.
Bitwise just reshuffled its marquee crypto index fund, and two familiar names didn’t make the cut. The asset manager removed Polkadot (DOT) and Avalanche (AVAX) from the Bitwise 10 Crypto Index ETF (BITW) on July 9, replacing them with Hyperliquid (HYPE) at a 0.93% weighting and Stellar (XLM) at 0.38%.
Here’s the thing: DOT and AVAX were part of the original roster when BITW debuted on the NYSE Arca back in December 2025. Their tenure lasted roughly six months.
What changed and why it matters
BITW tracks a market-cap-weighted index of the ten largest crypto assets. HYPE currently sits as approximately the 10th largest cryptocurrency by market capitalization, hovering around $15 billion. That ranking is driven largely by the protocol’s dominance in decentralized perpetual futures trading.
Stellar slotted in at a more modest 0.38% allocation. XLM has been around since 2014, making it one of the elder statesmen of the altcoin world.
Hyperliquid’s supply problem
Only about 22% of HYPE’s total supply of 1 billion tokens is currently circulating. That means roughly 780 million tokens are still locked up, waiting for their scheduled release. When you do the math on full dilution, HYPE’s valuation could stretch toward $64 billion, a figure that would place it comfortably in the top five crypto assets by market cap.
The protocol’s buyback mechanism, which uses trading fees to repurchase HYPE from the open market, acts as a counterweight to supply pressure.
Bitwise is doubling down regardless
Bitwise launched a dedicated Spot Hyperliquid ETF, ticker BHYP, on May 15 with a sponsor fee of 0.34%. That product also includes staking options, meaning investors can earn yield on their HYPE exposure through the fund.
What investors should actually watch
With 78% of supply still locked, even moderate unlock events could meaningfully impact price. Investors holding BHYP or BITW should understand that their exposure to HYPE carries dilution risk that Bitcoin and Ethereum holdings simply don’t.
The 0.34% sponsor fee on BHYP is aggressive by crypto fund standards, and it signals that fee competition among crypto ETF issuers is intensifying. For investors, lower costs mean more of the returns end up in their pockets rather than the fund manager’s.