Today the Convictions portfolio held Hyperliquid (HYPE -- the token that powers a decentralized trading platform where you can buy and sell crypto with leverage, without a company acting as the middleman) while the broader crypto market was mostly quiet. The one notable move was HYPE surging about 5.7 percent, driven by Bitwise Asset Management launching the first US ETF for HYPE that includes what is called native staking. This is worth explaining, because it is actually quite different from every crypto ETF that came before it.
When Blackrock or Fidelity launched Bitcoin (BTC -- the original and largest cryptocurrency) ETFs in early 2024, the product was straightforward: you buy a share of the fund, the fund holds Bitcoin in a vault, and your share price goes up or down with Bitcoin price. The fund charges a small fee. You get price exposure and nothing more. This is the same model as a gold ETF -- it just tracks the price.
Some cryptocurrencies have a different economic design. Instead of using energy to secure the network (the way Bitcoin does), they use a system called proof of stake, where holders lock up tokens as collateral and earn rewards -- similar to how a savings account earns interest, except the account here is the protocol itself. Hyperliquid uses this model: HYPE holders who stake their tokens earn a portion of the fees generated by the trading platform. The Bitwise HYPE ETF is the first US-listed fund to pass these staking rewards through to shareholders. Your total return has two components: price movement of the token, plus an ongoing yield paid in the token itself.
The insight driving this: a Bitcoin ETF captures the monetary premium of BTC but leaves a substantial part of the blockchain economy on the table. For utility tokens like HYPE that generate real fee revenue, not including the yield is like holding a rental property through a fund that collects rent on your behalf but never passes it to you.
The Convictions portfolio holds HYPE at a 30 percent target weight, based on the thesis that decentralized trading infrastructure will capture a meaningful share of global crypto trading volume from centralized exchanges. The Bitwise ETF launch validates that institutional capital is beginning to take this thesis seriously. The staking component signals what the Charles Gave framework (a macro investing approach developed by French economist Charles Gave) calls productive capital -- an asset that pays you while you wait. HYPE staking yield is generated by actual trading activity on the platform. When trading volume grows, the yield grows. This creates a feedback loop that a pure price-tracking ETF would never expose.
Native staking inside an ETF is genuinely novel territory. The Clarity Act (a bipartisan piece of US legislation advancing through the Senate that aims to define which digital assets are commodities versus securities) has not yet become law, and a regulatory reversal could force the fund to stop passing rewards through. There is also smart-contract risk: staking rewards flow from the Hyperliquid protocol code, and if that code has a vulnerability and is exploited, the yield disappears. The Kelp DAO hack in May 2026 that drove nearly 2.6 billion dollars away from the LayerZero bridge is a recent reminder that this risk is not theoretical.
For someone new to investing: a crypto ETF with native staking is more like a dividend-paying stock than a commodity fund. The return has two parts -- price and income -- and the income is backed by real protocol usage. Whether that is more or less risky than a pure price play depends on your view of the platform durability. In the Convictions portfolio, the bet is that Hyperliquid is durable enough to justify the exposure. Today's 5.7 percent move and the Bitwise ETF launch are early evidence the market is starting to agree. The conclusion is invalidated if Hyperliquid trading volume stagnates, a protocol exploit drains the staking pool, or the SEC rules that staking rewards inside an ETF constitute unregistered securities.