21Shares Files Proposal for New Hyperliquid (HYPE) ETF

On October 29, 21Shares submitted a proposal to launch a new Exchange-traded fund (ETF) that tracks the performance of Hyperliquid’s native token, HYPE. 

The filing comes just days after several other major firms introduced similar products. This shows how asset managers are pushing forward despite ongoing regulatory slowdowns in the U.S.

21Shares Moves to Launch Hyperliquid ETF

21Shares has filed a Form S-1 registration statement with the U.S. Securities and Exchange Commission (SEC). This came after the asset manager launched the 21Shares Hyperliquid ETP with the ticker HYPE on the SIX Swiss Exchange.

According to the filing, 21Shares US LLC will serve as the sponsor of the fund. Coinbase Custody Trust Company, LLC, and BitGO Trust Company, Inc. will safely hold the real assets behind the fund. 

The new ETF will follow HYPE, the main token of the Hyperliquid blockchain, a Layer 1 network built for decentralized finance (DeFi) apps. HYPE is now the 16th largest cryptocurrency by market value, showing its growing importance in the DeFi space.

21Shares Enters Hyperliquid ETF Race

This move puts 21Shares among other big asset managers joining the Hyperliquid ecosystem. Bitwise had already filed for its Bitwise Hyperliquid ETF in September. This shows that more institutional investors are becoming interested in HYPE and after Ark’s Cathie Wood sees potential in the platform. 

The new filing also comes after a busy week for crypto ETFs. Companies like Grayscale, Bitwise, and Canary have all launched new funds linked to different digital assets such as Solana (SOL), Litecoin (LTC), and HBAR. These new launches show that competition is growing among fund issuers as they try to meet investor demand for a wider range of crypto options.

The 21Shares’ ETF filing comes shortly after FalconX, a global crypto prime broker, agreed to acquire the company. According to a recent report, the merger aims to combine 21Shares’ ETP expertise with FalconX’s trading and brokerage infrastructure. Together, the firms plan to create more types of crypto investment products. 

Regulatory Uncertainty Amid U.S. Government Shutdown

The surge in crypto ETF filings comes at a challenging time for the U.S. Securities and Exchange Commission (SEC). The agency has been affected by a government shutdown after Congress failed to approve new funding. With many SEC staff on furlough, the agency’s ability to review filings has been limited.

However, the SEC recently gave new guidance that lets companies move ahead with their offerings. Investors can now file a Form S-1 registration statement without adding a delaying amendment.

This means products can automatically go live 20 days after filing, unless the SEC intervenes. Just before the shutdown, the SEC approved new listing standards for three U.S. exchanges. 

These changes made it easier to list commodity-based trust shares, including those linked to cryptocurrencies. As a result, several pending crypto ETF applications could now proceed more quickly.