[ { "speaker": "Speaker 1", "text": "[music] >> All right, joining me is Matt Hogan, Chief Investment Officer at Bitwise, who of course is one of the world's leading crypto asset managers. Currently over 11 billion dollars in client assets. That's" }, { "speaker": "Speaker 1", "text": "across ETFs, separately managed accounts, private funds, hedge fund strategies, staking. And I'll tell you on the ETF side, they're actually now up to 20 ETFs in all, nearly 6 billion" }, { "speaker": "Speaker 1", "text": "dollars in assets, including their most recent launch, the Bitwise Hyperliquid ETF, ticker BHYP, B Hype, very nice ticker symbol. And Hyperliquid will be the focus of our conversation. And so" }, { "speaker": "Speaker 1", "text": "Matt, it is always great having you on the podcast. Thank you for joining me." }, { "speaker": "Speaker 2", "text": ">> Yeah, Nate, it's always fun to be on." }, { "speaker": "Speaker 1", "text": "It's good to see you. And uh yeah, thanks for having me." }, { "speaker": "Speaker 1", "text": ">> All right, so the Bitwise Hyperliquid ETF this just launched a little over 2 weeks ago. And I was looking this morning, already it's nearing 70 million dollars in total assets. There have been" }, { "speaker": "Speaker 1", "text": "10 straight days of inflow since launch." }, { "speaker": "Speaker 1", "text": "I looked at trading volume, that's been excellent. So to start, I'm just curious, what's been your initial reaction to the launch of B Hype in this early investor interest?" }, { "speaker": "Speaker 2", "text": ">> Yeah, it's exceeded my expectations. I knew it would be successful, but it's done even better than I thought. I think this is probably the best single asset crypto ETP launch since Bitcoin. When" }, { "speaker": "Speaker 2", "text": "you adjust for the size of Hyperliquid and the scale of excitement, uh 10 straight days of inflows, you know, nearly 60 million dollars flowing in. I think that's going to accelerate from here. I" }, { "speaker": "Speaker 2", "text": "think crypto was hungry for a new story." }, { "speaker": "Speaker 2", "text": "Hyperliquid is that new story, and the ETF hit at the right time. So, yeah, it's been a huge win." }, { "speaker": "Speaker 1", "text": ">> And just for background, obviously Bitwise has continued to expand its crypto ETF lineup. I mentioned at the top that you're now up to 20 ETFs overall, but from my perspective, and" }, { "speaker": "Speaker 1", "text": "this has always been the case, you are being very thoughtful here. You're not just launching ETFs because some random crypto asset exists. And so, I'm also curious just about the decision-making behind launching a spot" }, { "speaker": "Speaker 1", "text": "high ETF. Like, why did Bitwise decide to pursue this to begin with? Because you were early here. Just about every other ETF issuer did not pursue this." }, { "speaker": "Speaker 2", "text": ">> Yeah, absolutely. It's sort of like a nuclear switch sort of thing. They You need two things to be true for Bitwise to launch an ETF. So, we need to think that there's demand in the market," }, { "speaker": "Speaker 2", "text": "right? The signal here was that Hyperliquid was performing well, hype was performing well, and it had a very strong community that had strong opinions about that. We like to see that. So, you need to think it's viable" }, { "speaker": "Speaker 2", "text": "in the market. But then, you need to underwrite it from an investment perspective. That's what you were saying about Bitwise being selective. We won't launch on any crypto asset, only assets" }, { "speaker": "Speaker 2", "text": "we believe in. In the case of Hyperliquid, here's what we saw." }, { "speaker": "Speaker 2", "text": "I think crypto has been trying to reinvent how finance works for the last 10 years. And essentially, every attempt has been interesting, exciting, but had a major pullback. You could think of a" }, { "speaker": "Speaker 2", "text": "platform like Binance, incredibly innovative, incredibly successful, huge number of users, new things like perps, attracting big attention, but it's a centralized offshore exchange with" }, { "speaker": "Speaker 2", "text": "significant regulatory risk. You think about something like Uniswap, an incredible decentralized trading protocol, enormous volume, sometimes more trading volume than Coinbase. It's" }, { "speaker": "Speaker 2", "text": "amazing, but the token was launched in the Gensler era, right? When you couldn't have a token that accrued value, which makes it a challenging investment. I love Uniswap, but the token has some token economic" }, { "speaker": "Speaker 2", "text": "challenges. Or you think of things like DYDX or some of the other sort of perp future protocols that have been out there, but have had challenging UX or not enough throughput. Hyperliquid, because of when" }, { "speaker": "Speaker 2", "text": "it launched and because of where it came in the journey, put all of those things together. It's a perpetual futures exchange first and foremost, but expanding into other areas. It is" }, { "speaker": "Speaker 2", "text": "incredible UX because crypto now is in this broadband era where you can do 100,000 plus transactions per second and make it very easy to use. The token accrues value directly from the fees" }, { "speaker": "Speaker 2", "text": "generated on the platform, right? Every 99% of all trading fees goes to buy back Hyperliquid. I think that's possible cuz we're out of the Gensler era and into the Atkins era. So, it was sort of the" }, { "speaker": "Speaker 2", "text": "finally we had a solution to this problem of reinventing finance. We thought that was going to scale. I still think it's going to scale and so it checked those boxes and we thought it" }, { "speaker": "Speaker 1", "text": "would be a great asset to launch." }, { "speaker": "Speaker 1", "text": ">> Okay, and in that description you just gave of of Hyperliquid, I think you gave some high-level detail. Let's get into the weeds just a little bit and I guess if you were to explain Hyperliquid to a" }, { "speaker": "Speaker 1", "text": "novice, which I I must say that's truly a gift of yours, by the way. You've always been able to boil things down in a way that anyone can understand. And so, no pressure here, but please do that for" }, { "speaker": "Speaker 2", "text": "Hyperliquid." }, { "speaker": "Speaker 2", "text": ">> Well, let's focus on it's on the first place that's making waves, which is really in the perpetual futures market, right? So, perpetual futures are an idea that dates back all the way to Robert" }, { "speaker": "Speaker 2", "text": "Shiller. Us in the ETF industry might remember the macro shares, which were sort of a version of an attempt at this." }, { "speaker": "Speaker 2", "text": "But the idea is in unlike traditional futures contracts which expire at a certain date, perpetual contracts, or as the name suggests, perpetual. So, you can gain exposure to something through a" }, { "speaker": "Speaker 2", "text": "futures contract, and it will never expire. And there's a mechanism that allows that to do it by charging a fee to maintain the position, but you can think of it as an exciting innovation on" }, { "speaker": "Speaker 2", "text": "the futures market, which is a giant, right, multi-trillion dollar market, which has this big flaw, which is periodically the contracts, and and you have to roll them over. That's a pain." }, { "speaker": "Speaker 2", "text": "Perpetuals solve that problem. So, what to what extent, the first place Hyperliquid made its name is by offering perpetual futures, first on crypto, but then also on traditional assets. You can" }, { "speaker": "Speaker 2", "text": "trade the S&P 500. You can trade oil." }, { "speaker": "Speaker 2", "text": "You can trade other commodities." }, { "speaker": "Speaker 2", "text": "And there's some interesting things that come along with this capability. You can trade them 24/7, 365. They never shut down. So, Hyperliquid, for instance, took a big step up at the start of the" }, { "speaker": "Speaker 2", "text": "Iran war, when all other exchanges globally were closed, cuz that started on a Saturday, but Hyperliquid was open." }, { "speaker": "Speaker 2", "text": "And so, it became the default way to trade oil. So, it's this new type of futures exchange, uh but it actually it has broader ambitions than that. It really wants to be a super app, where" }, { "speaker": "Speaker 2", "text": "you can do all sorts of financial activity. So, they're launching prediction markets on there. I wouldn't be surprised to see them move into spot." }, { "speaker": "Speaker 2", "text": "You can think of it really as a competitor to CME, Robinhood, etc., with a crypto underlying that makes it very easy to use. And that's that's that's sort of what it is, and it's growing" }, { "speaker": "Speaker 2", "text": "enormously quickly on a global basis." }, { "speaker": "Speaker 1", "text": ">> And on the easy to use, I know you've heard this uh slogan around Hyperliquid before, but um I keep hearing it's DeFi with a TradFi-like user interface." }, { "speaker": "Speaker 2", "text": ">> It's totally right. Yeah, you don't you don't need to be crypto native to use Hyperliquid. You you'll feel very comfortable there. It is easy to use." }, { "speaker": "Speaker 2", "text": "This is a little bit what I was talking about earlier. All of these ideas existed in the past, a perpetual futures exchange. There were multiple instances, defi applications. There were multiple" }, { "speaker": "Speaker 2", "text": "instances, but they were all imperfect in some way. Hyperliquid sort of perfects them. To borrow an internet analogy, there plenty of businesses we use today on the internet that failed" }, { "speaker": "Speaker 2", "text": "previously, right? We used Chewy to get pet food delivered, and pets.com is one of the most famous blow-ups in internet history, right? We uh get things delivered by Amazon instantly, and" }, { "speaker": "Speaker 2", "text": "cosmo.com tried that in 1999 and failed." }, { "speaker": "Speaker 2", "text": "Often these ideas are good ideas, but they're gated by technological factors." }, { "speaker": "Speaker 2", "text": "Hyperliquid sort of came along at the right time, right place, right regulatory setting, right technology setup to combine all the promises of defi into a new easy-to-use platform," }, { "speaker": "Speaker 2", "text": "and that's why it's really taken off so much." }, { "speaker": "Speaker 1", "text": ">> On the note of the right uh technology setup, I think one question some people have is uh you were mentioning some of the other decentralized exchanges earlier that run on say Ethereum or" }, { "speaker": "Speaker 1", "text": "Solana or whatever, but Hyperliquid is its own layer one blockchain. Uh why does that matter?" }, { "speaker": "Speaker 2", "text": ">> Yeah, it really matters for two reasons." }, { "speaker": "Speaker 2", "text": "The first is that it controls its own destiny. So, if you run on Ethereum or you run on Solana, you're dependent on how that network is functioning and whether it's functioning well. Uh to" }, { "speaker": "Speaker 2", "text": "make an analogy, imagine that you had to get from Atlanta to Washington, D.C., and you could go on I-95 or you could go on your own highway that you built, and you control all of the traffic. You're" }, { "speaker": "Speaker 2", "text": "probably going to have a more consistent path on your own highway because you can set the fees, you can set the number of cars on it, you can set the rules, you can set the policing as opposed to being" }, { "speaker": "Speaker 2", "text": "on public infrastructure. So, the first reason it's important that Hyperliquid has its own layer one blockchain is it controls the rails. It doesn't matter if fees spike on Ethereum or if it jams up" }, { "speaker": "Speaker 2", "text": "or if Solana goes down. It controls its own rails. And then the second piece is more technical which has to do with what in crypto's called MEV which is extracting value from the ordering of" }, { "speaker": "Speaker 2", "text": "trades in specific blocks. When you don't have your own layer one network, you're more subject to people extracting those fees which makes it more costly for users to trade and transact. They" }, { "speaker": "Speaker 2", "text": "don't get the same quality of execution." }, { "speaker": "Speaker 2", "text": "When you hold your own blockchain, you can redirect that sort of MEV fee back into the value of the entity. So, it's both more deterministic that it goes at exactly the pace you want. And then it's" }, { "speaker": "Speaker 2", "text": "actually a better user experience because you don't have this value seepage that you get when you use these other blockchains. It's not the only way to run these things. I'm not saying that" }, { "speaker": "Speaker 2", "text": "anything that runs on ETH or Solana is bad, but it does have these unique advantages if you can get a high quality layer one blockchain up and running." }, { "speaker": "Speaker 1", "text": ">> And that description right there is why I always say you have a gift for boiling things down in a way that anybody can uh can understand. Um we'll we'll get to the ETF here in a moment, but can you" }, { "speaker": "Speaker 1", "text": "talk a little bit about the regulatory backdrop in terms of access to Hyperliquid because this isn't currently fully available to US investors, correct?" }, { "speaker": "Speaker 2", "text": ">> Yeah, that's right. You can try it right now. Go type in Hyperliquid. You'll get a big red banner at the top that says you can't access this. Look, this is an offshore perpetual futures exchange." }, { "speaker": "Speaker 2", "text": "It's available to the world, but not US investors because we have very strict regulations around derivatives exchanges here in the US. Um I suspect that will change over time. You're certainly" }, { "speaker": "Speaker 2", "text": "seeing traditional derivatives exchanges pointing out the risks of the growth of this platform and trying to slow down its entry into the US." }, { "speaker": "Speaker 2", "text": "The global market is a very large market. Look, ultimately I think Hyperliquid will be available to US investors, but there miles to go until we get there." }, { "speaker": "Speaker 2", "text": "But uh I don't think you have to think that will happen to be bullish. There a lot of investors in the world, a lot of offshore hedge funds and offshore traders who can access Hyperliquid and" }, { "speaker": "Speaker 2", "text": "drive its growth really significantly even before it gains full access to the US market. But you know, you should know that this is an early emergent uh exchange and there more regulatory risks" }, { "speaker": "Speaker 2", "text": "here than there are in the CME. Like that's just objectively true. Um so there's there's no reward without risk." }, { "speaker": "Speaker 2", "text": "There definitely risks here. Regulation is one of them." }, { "speaker": "Speaker 1", "text": ">> So given that regulatory backdrop and admittedly I should know the answer to this question. I'm a little ashamed that I don't. But if US investors can't use Hyperliquid, how did you get this ETF through the the" }, { "speaker": "Speaker 1", "text": "SEC? Did this fall under the generic listing standards? Again, I'm I'm ashamed I don't know the answer to that." }, { "speaker": "Speaker 2", "text": ">> No, that's a great great answer. Yes, absolutely falls under the under the GLS in that there there futures based ETFs and European ETFs um that allow you gain exposure to height. So in this specific instance," }, { "speaker": "Speaker 2", "text": "um there's some leveraged ETFs that were approved uh and that triggered the sort of entry rule." }, { "speaker": "Speaker 2", "text": "Um but I would say more broadly, Nate, there plenty of instances of businesses and entities that have things approved globally but not in the US which we can still invest in, right? Uh the Toronto" }, { "speaker": "Speaker 2", "text": "Stock Exchange is a ticker. Um but you know, but but or you know, there there many examples like that. Uh companies that have drugs approved internationally but not in the US. Um But it is a it's a" }, { "speaker": "Speaker 1", "text": "it's a risk worth worth noting." }, { "speaker": "Speaker 1", "text": ">> Okay, so we've talked about the regulatory backdrop. You've talked about Hyperliquid, the exchange itself. Let's talk just a little bit more if you don't mind about the hype token and" }, { "speaker": "Speaker 1", "text": "perhaps you can just explain some basics here and maybe the role that it plays in the Hyperliquid ecosystem. I know you alluded to earlier sort of the buyback mechanism." }, { "speaker": "Speaker 1", "text": "I I was looking this morning, hype is now a top 10 crypto asset overall. It's done that in what, less than two years?" }, { "speaker": "Speaker 1", "text": ">> Yeah." }, { "speaker": "Speaker 1", "text": ">> 16 billion market cap. So yeah, talk talk a little more about the the token." }, { "speaker": "Speaker 2", "text": ">> It's really remarkable. So the way that it works is when you trade on the Hyperliquid platform, you generate fees like you would on any derivatives exchange and 99% of those fees go back" }, { "speaker": "Speaker 2", "text": "to buying back this token, which creates strong upward pressure on the price of the token because you have a persistent bid, right? It's running at extraordinarily high revenues, extraordinarily high buybacks, billion" }, { "speaker": "Speaker 2", "text": "dollar plus a year, which is driving the price up. An interesting fact, if you look at it recently set an all-time high on price for the hype token, but it not did not set an all-time high on market" }, { "speaker": "Speaker 2", "text": "cap for the hype token, which is sort of a mind-bending idea. And the reason for that is that it bought back so much that the circulating supply had come down. So even though the price was higher, the" }, { "speaker": "Speaker 2", "text": "actual market cap was lower. The the real A lot of people ask why does hype have a token even to begin with? There are there a number of answers to that, but one of the first and most important was it was a way to" }, { "speaker": "Speaker 2", "text": "jump start the growth of the Hyperliquid exchange, right? It was sort of a solution to the cold start problem where the value of any network grows with the number of people participating in that" }, { "speaker": "Speaker 2", "text": "network and the liquidity on something like an exchange, but how do you get the initial liquidity? And the Hyperliquid token incentivize that early growth. And then because of this buyback feature," }, { "speaker": "Speaker 2", "text": "people are incentivized to stay on board because there's perpetual buying motion of this token. If people make an analogy to a stock buyback, I think there's like many analogies value in that. It's sort" }, { "speaker": "Speaker 2", "text": "of similar to that. It's obviously not exactly the same." }, { "speaker": "Speaker 2", "text": "Um but you do get this buy pressure from all the fee generation on the platform that has driven the price up. And if you think Hyperliquid's going to be a globally important financial platform," }, { "speaker": "Speaker 2", "text": "it has a long way to go. Right? It is a tiny fraction of total derivatives volume globally. If it even got to 1% or 5% of global derivatives volume, you're talking about a you know, 10 20 30 40" }, { "speaker": "Speaker 2", "text": "50X in terms of transaction volume. So there's there's a lot of growth potential if it in fact succeeds at the scale many people think it will." }, { "speaker": "Speaker 1", "text": ">> Yeah, and I think very simply uh rising trading activity on the platform itself because of the mechanism you just described that's going to directly benefit token holders moving forward. Um" }, { "speaker": "Speaker 1", "text": "talk a little bit about the uh the staking. That's how uh the the network is secured." }, { "speaker": "Speaker 1", "text": "Um my understanding is if you stake hype, then it can reduce the trading fees if you are trading on the platform." }, { "speaker": "Speaker 2", "text": "Can you just talk a little bit about that?" }, { "speaker": "Speaker 2", "text": ">> Yeah, absolutely. And let me make one more point on that buyback mechanism because I think it's important. We've sort of been trained in crypto to think that tokens don't accrue value because" }, { "speaker": "Speaker 2", "text": "most tokens don't have this flywheel where fees generated on the platform go directly to buying back the token. If you think about something like Uniswap, a very small fraction of fees and only" }, { "speaker": "Speaker 2", "text": "on specific areas go towards this sort of mechanism. Hyperliquid is the far end of that, right? 99% of fees go directly towards buying this back. So the flywheel spins really fast. I think it's" }, { "speaker": "Speaker 2", "text": "going to take investors a while to realize that this is a Gen 2 token. Like it's a new version. It's not like the past. And as people sort of underwrite that and realize that, I think it will" }, { "speaker": "Speaker 2", "text": "drive real interest. Yeah, you mentioned you mentioned staking." }, { "speaker": "Speaker 2", "text": "Obviously with a layer one blockchain, you need the blockchain to run and function. And most modern blockchains are proof of stake blockchains. Bitcoin is the outlier with the old school proof" }, { "speaker": "Speaker 2", "text": "of work approach. Hyperliquid is a modern blockchain with um a proof of stake mechanism. Bitwise is one of the larger staking providers in the Hyperliquid ecosystem. We stake about" }, { "speaker": "Speaker 2", "text": "70% of the assets in this ETF. And then we also stake additional assets in our core staking business." }, { "speaker": "Speaker 2", "text": "Um but yeah, it's as you described, it's participating in the ecosystem. You earn Hyper rewards from it. There are certain advantages for stakers from a trading perspective." }, { "speaker": "Speaker 2", "text": "Um but really it's just similar in many ways to ETH, uh Solana, and other staking uh ecosystems in that you earn rewards for making the network run." }, { "speaker": "Speaker 1", "text": ">> Okay, so now that everybody has all of that background, let's touch on the ETF, the Bitwise Hyperliquid ETF BHYP. Um I know the fee is uh 34 basis points, though I believe that is waived for" }, { "speaker": "Speaker 1", "text": "another couple of weeks here." }, { "speaker": "Speaker 1", "text": "Uh but regardless, very competitive fee." }, { "speaker": "Speaker 1", "text": "I also know you're mentioning uh staking. BHYP offers in-house staking, uh which is a differentiator. And you can comment on either of those, but is there anything else you would mention" }, { "speaker": "Speaker 1", "text": "about the ETF itself? I know pretty straightforward. This is a it's a spot ETF. It holds the underlying asset. Any other uh points you would make here?" }, { "speaker": "Speaker 2", "text": ">> Yeah, I I think I think the two you mentioned are are really important. Uh obviously a very competitive fee. The less you spend, the more you keep." }, { "speaker": "Speaker 2", "text": "Um you know, strong staking with a vast majority of the assets from one of the largest staking service providers in the Hyperliquid ecosystem. Staking in-house allows us to offer a better deal to the" }, { "speaker": "Speaker 2", "text": "ETF than we would if we worked with a third party and we're fortunate to have that business to tap into. And then of course, you know, with Bitwise, maybe the unique thing that you get is the" }, { "speaker": "Speaker 2", "text": "support of the Bitwise ecosystem." }, { "speaker": "Speaker 2", "text": "I anyone can ask us any question about crypto at any time and we'll respond within 24 hours from my research team." }, { "speaker": "Speaker 2", "text": "Uh so if you're a participant in in B HYB and have a question about Hyperliquid, you can send in a question and my team will answer you in 24 hours." }, { "speaker": "Speaker 2", "text": "That's sort of the the bonus thing that Bitwise does uniquely and we're we're pretty proud of it. But yeah, think of it as a plain vanilla uh crypto ETP with staking added on like a" }, { "speaker": "Speaker 2", "text": "two two and a quarter percent yield currently uh that gives exposure to the one of the most exciting projects in crypto. I think it's a pretty good offering. And a great as you mentioned." }, { "speaker": "Speaker 1", "text": ">> fantastic ticker with B HYB and I I love what you just said there about answering questions within 24 hours. I will tell anybody um if you're going to invest in crypto ETFs, obviously that responsiveness is" }, { "speaker": "Speaker 1", "text": "great but make sure your issuer actually understands crypto. And this is what you do 24/7. Uh you're not dabbling in other areas of the market. You focus on crypto. So I just want to make that point." }, { "speaker": "Speaker 2", "text": ">> I love that. Yeah, bull or bear market alike uh crypto is all that we do." }, { "speaker": "Speaker 2", "text": "Questions@bitwiseinvestments.com, you know, send us an email, test us out." }, { "speaker": "Speaker 2", "text": "Uh I love to put my team at work." }, { "speaker": "Speaker 2", "text": "They're sitting right outside there." }, { "speaker": "Speaker 1", "text": "They're ready to ready to answer those questions." }, { "speaker": "Speaker 1", "text": ">> I love that. And uh on the ETF too, did I see that Bitwise is actually buying HYB in that you're using a portion of the management fees from B HYB to to buy and stake HYB directly on the firm's balance sheet. Do" }, { "speaker": "Speaker 2", "text": "I have that correct?" }, { "speaker": "Speaker 2", "text": ">> That's exactly right. Yeah, we like to align with the community with a portion of the management fee. In the Hyperliquid ecosystem, a core part of that community vibe is this buyback" }, { "speaker": "Speaker 2", "text": "mechanism, right? Where you maintain it." }, { "speaker": "Speaker 2", "text": "So, we didn't want to be taking the management fee and liquidating hype as creating selling pressure. We wanted to do the opposite. So, we take 10% of the proceeds, hold them on our balance" }, { "speaker": "Speaker 2", "text": "sheet, we're aligned with the growth of Hyperliquid, those assets are staked." }, { "speaker": "Speaker 2", "text": "It's something we try to do across all of our ETFs. You may remember on BITB, our Bitcoin ETF, we donate 10% of the proceeds to Bitcoin open-source developers. So, we're we we we find it" }, { "speaker": "Speaker 2", "text": "really important to align with the community, to understand the community's goals. In this case, this is central to sort of the ethos of the Hyperliquid community." }, { "speaker": "Speaker 2", "text": "And so, we will do that in perpetuity, and we're excited to be hype holders here at Bitwise." }, { "speaker": "Speaker 1", "text": ">> Okay, so for investors who maybe do take an allocation to be hype, I'd love to have you talk more about the investment opportunity moving forward. And as we always say, neither you or I have a" }, { "speaker": "Speaker 1", "text": "crystal ball. None of this is intended to be any sort of investment advice, but I did see where you said something along the lines of Hyperliquid should be valued as a global super app, right?" }, { "speaker": "Speaker 1", "text": "That the addressable universe, it's not the two and a half or three trillion dollars in crypto. It's a 600 trillion-dollar market for global assets. And so, maybe you can elaborate on that, what you mean" }, { "speaker": "Speaker 1", "text": "by that, and just talk about the potential opportunity moving forward." }, { "speaker": "Speaker 2", "text": ">> Yeah, yeah, absolutely. That's the really important part here. This is not a crypto app. This is a financial app that uses crypto in the back end to create a new financial experience that" }, { "speaker": "Speaker 2", "text": "in many ways is better than the traditional system. So, the growth of Hyperliquid is not tied to how many people want perpetual futures exposure to Bitcoin, right? It's tied to how many people want" }, { "speaker": "Speaker 2", "text": "to use this new ecosystem that's 24/7, 365, that lets you cross margin between your crypto, your equity, your bond, your commodity, your prediction markets all together in one ecosystem with this" }, { "speaker": "Speaker 2", "text": "super slick interface that never goes down and processes transactions instantly. Already today, Nate, about 50% of the volume is in non-crypto assets. I think that will eventually be" }, { "speaker": "Speaker 2", "text": "90% plus of the volume." }, { "speaker": "Speaker 2", "text": "I think that's really important because I think people underestimate the size of the market that this is going after." }, { "speaker": "Speaker 2", "text": "Again, it's not a crypto app. It sort of belongs in XLF to make an ETF analogy, right?" }, { "speaker": "Speaker 2", "text": "Like it's one of the fastest growing emerging fintechs in the world. It just happens to be in a crypto architecture." }, { "speaker": "Speaker 2", "text": "And so the investment you're making is a bet that that will continue. And as it continues, more fees from transaction activity, more buyback activity, and the asset could rise. It's still a" }, { "speaker": "Speaker 2", "text": "relatively small asset on a circulating supply basis, right? It's not uh it's like $15 billion or so. It has a huge amount of space to grow as people sort of understand the scale of what it's" }, { "speaker": "Speaker 1", "text": "trying to accomplish." }, { "speaker": "Speaker 1", "text": ">> And I think as you know, I always like to take a full 360° view of whatever asset or investment that uh I'm I'm discussing." }, { "speaker": "Speaker 1", "text": "What about competition for Hyperliquid?" }, { "speaker": "Speaker 1", "text": "Like How How do you think about that as a potential risk moving forward, whether we're talking about competition in the DeFi space or even in the the TradFi space? How do you think about that?" }, { "speaker": "Speaker 2", "text": ">> Yeah, it's massively important. They're both going to come for Hyperliquid." }, { "speaker": "Speaker 2", "text": "Everyone is looking at Hyperliquid right now, whether you're a new DeFi protocol, an existing DeFi protocol, the New York Stock Exchange, the CME, etc. Just go to the Wall Street Journal, you'll see" }, { "speaker": "Speaker 2", "text": "those traditional exchanges trying to slow down Hyperliquid, not because they're anti what it's doing from a perpetual futures perspective, but because they want the ability to catch" }, { "speaker": "Speaker 2", "text": "up. So there is going to be significant competition for Hyperliquid in the future, and there is no guarantee that it will win. I will say the architecture is really elegant, the user experience" }, { "speaker": "Speaker 2", "text": "is extraordinarily good, the community is very strong, so I think it has a very good chance at succeeding. And if it does, you know, you could see the market cap grow very significantly. But there" }, { "speaker": "Speaker 2", "text": "is some competition already, and a year from now there's going to be a huge amount of competition, and so Hyperliquid is going to continue to need to execute to stay ahead of that. Uh you" }, { "speaker": "Speaker 2", "text": "shouldn't just uh buy it and sleep on it. You'll have to monitor uh how it's competing in that space." }, { "speaker": "Speaker 1", "text": ">> Okay. And then lastly, before I let you go here, uh again coming back to maybe how investors and advisors should think about allocating to the hype token or or the BHIP ETF. I know you and I have" }, { "speaker": "Speaker 1", "text": "discussed this before that perhaps Bitcoin is best viewed as digital gold, store value, uncorrelated asset. We don't need to get get down that path, but you have Bitcoin sort of over here," }, { "speaker": "Speaker 1", "text": "and then you have other crypto assets that are much more similar to technology plays, technology equity plays. Is the latter is is that the right mindset for hype if somebody is considering an allocation?" }, { "speaker": "Speaker 2", "text": ">> Yeah, that's absolutely the right mindset for hype. The way I would think about it is as an exciting financial application that you want exposure to." }, { "speaker": "Speaker 2", "text": "You might be excited about Robinhood, you might be excited about like Stripe on the private side, you might be excited about Revolut over in Europe, you might be excited about Hyperliquid in the futures and" }, { "speaker": "Speaker 2", "text": "derivatives market or the prediction market area. That's how I would think of it. Uh it's not digital gold, it's not even a traditional layer one. It's a financial application that is arguably" }, { "speaker": "Speaker 2", "text": "the fastest growing in the world with a shot on a very large, you know, multi-trillion-dollar market. Um that's the right way to bucket it, and so far it's executing well. It's still very" }, { "speaker": "Speaker 2", "text": "early. I'll add one more anecdote that makes me both bullish and understand the location of where Hyperliquid is. I was at a single family office conference 2 weeks ago in London." }, { "speaker": "Speaker 2", "text": "I introduced the idea of Hyperliquid to the audience. Uh zero people had heard of it. Right? So it is still very early." }, { "speaker": "Speaker 2", "text": "I think most people aren't aware of how important and how disruptive a technology it is. It feels like that early moment where the world is just waking up to something. I think that's" }, { "speaker": "Speaker 1", "text": "where we are on Hyperliquid." }, { "speaker": "Speaker 1", "text": ">> Well, Matt, this has been absolutely fantastic. I always enjoy visiting. And I know sometimes maybe you think I'm over the top with this, but I truly appreciate your ability to help educate" }, { "speaker": "Speaker 1", "text": "people on on crypto. So thank you for that. Congratulations on the initial success of B Hive. And thank you for joining me." }, { "speaker": "Speaker 1", "text": ">> Uh thank you for having me. It's always fun." }, { "speaker": "Speaker 1", "text": ">> That was Matt Hogan, Chief Investment Officer at Bitwise. Hope you enjoyed this episode of Crypto Prime. As always, you can stay up to date on all of my latest guests by visiting" }, { "speaker": "Speaker 1", "text": "cryptoprimepodcast.com." }, { "speaker": "Speaker 1", "text": "Thank you for joining me, and see you again next time." }, { "speaker": "Speaker 3", "text": ">> Crypto Prime is hosted by Nate Chevreau, President of OTR Media LLC. Nate is also President of investment advisory firm Novadius Wealth Management. While OTR Media and Novadius are related by common" }, { "speaker": "Speaker 3", "text": "ownership, they are separate and distinct entities. And anything discussed on this program should not be construed as an official statement by Novadius. Some guests appearing on this" }, { "speaker": "Speaker 3", "text": "program may also be financial sponsors of Crypto Prime. This program is for informational purposes only and does not constitute investment advice. Investing in crypto assets involves substantial" }, { "speaker": "Speaker 3", "text": "risk, including the possible loss of principle. Any past performance figures discussed are not necessarily indicative of future results. Visit cryptoprimepodcast.com for more information." } ]