Heat 3 inches of oil to 360 degrees in a wide heavy-bottom
pan. Whisk the water and egg yolk in a medium bowl; stir in flour until just barely combined (it will be lumpy). Working in batches, dip shrimp into batter and fry until crisp and cooked through, 2 minutes. Transfer to a paper-towel-lined plate; keep warm until serving.
Whisk together hot sauce and butter until well combined. Serve warm with shrimp.