Bitwise has officially removed Polkadot (DOT) and Avalanche (AVAX) from its premier Bitwise 10 Crypto Index ETF (BITW), incorporating Hyperliquid (HYPE) and Stellar (XLM) instead in the most recent monthly adjustment.

The BITW ETF functions similarly to a stock index fund in the crypto realm. It consistently maintains a portfolio of the 10 largest qualifying coins based on market capitalization, allowing investors to gain exposure to HYPE and XLM without needing to purchase them directly.

Why This Change Matters for Investors

The latest rebalance indicates that HYPE has entered the fund with a weight of 0.93%, while XLM occupies a 0.38% stake. Notably, HYPE has become the fifth-largest holding in the ETF, surpassing major players like Cardano (ADA), Chainlink (LINK), Litecoin (LTC), and Sui (SUI). Bitcoin (BTC) still dominates the ETF, accounting for 77.54% of its total composition.

  • HYPE’s market cap stands at approximately $15 billion.
  • HYPE currently trades around $67.92, down from its all-time high of $76.70 set on June 16.
  • DOT has plummeted to about $0.83, a dramatic fall of 98% from its peak.
  • AVAX is down roughly 95% from its November 2021 high of $144, now trading at around $6.76.

Despite their removal from the ETF, DOT and AVAX continue to operate normally in terms of staking, development, and payment functionalities.

The Future of Hyperliquid in the ETF

Currently, it seems that Hyperliquid is likely to maintain its position within the ETF. With a market cap significantly larger than DOT and AVAX, HYPE’s valuation is approximately 10 times that of DOT and five times that of AVAX. This creates a substantial barrier for any potential challengers looking to dethrone it. Moreover, recent movements in crypto ETF flows showcase a positive trend for HYPE products, contrasting with outflows seen in Bitcoin-focused funds.

However, a looming concern is HYPE’s circulating supply; only about 22% of its maximum supply is currently in circulation. The fully diluted market cap approaches $64 billion, which is more than four times the current market cap, signifying potential pressure on prices due to upcoming supply unlocks.

What's Next for Investors?

As the cryptocurrency landscape continues to evolve, stakeholders should keep an eye on upcoming regulatory changes and market shifts that could impact these holdings. The situation for HYPE serves as a reminder of how rapidly market positions can change, as evidenced by DOT's decline from the ETF’s launch roster to its current ranking of 53rd.

Disclaimer: This material is for informational purposes only and does not constitute financial advice.