Asset management firm 21Shares has submitted an application to the U.S. Securities and Exchange Commission (SEC) for a new exchange-traded fund (ETF) designed to track the performance of Hyperliquid's native token, HYPE. The filing, dated October 29, 2025, positions 21Shares to potentially launch the second such product in the U.S. market, following a similar proposal from rival Bitwise in September.
This move highlights a growing trend among investment firms to offer regulated financial products for a wider range of digital assets, building on the significant success of Bitcoin and Ethereum ETFs launched earlier this year.
Key Takeaways
- 21Shares has officially filed with the SEC to create an ETF for the Hyperliquid (HYPE) token.
- This is the second proposed ETF for HYPE, signaling increasing institutional interest in the asset.
- The proposed fund will use Coinbase and BitGo as custodians for its digital asset holdings.
- The filing joins a queue of over 90 other crypto-related ETF applications currently under SEC review.
A New Wave of Crypto ETFs
The application from 21Shares marks another significant step in the integration of digital assets into mainstream financial markets. The proposed 21Shares Hyperliquid ETF aims to provide investors with direct exposure to HYPE, the native token of the Hyperliquid decentralized exchange, without requiring them to purchase and store the cryptocurrency themselves.
According to the filing, the fund will rely on established players in the digital asset space for security. Coinbase, the largest U.S. cryptocurrency exchange, and digital asset trust company BitGo have been named as custodians responsible for safeguarding the ETF's HYPE holdings.
This development comes as the SEC evaluates a large volume of applications for similar products. Over 90 proposals for crypto-focused ETFs are currently awaiting regulatory decisions, covering a diverse array of assets including Solana, Cardano, and XRP.
Understanding Hyperliquid
Hyperliquid is a decentralized exchange (DEX) that specializes in perpetual futures trading. Unlike centralized exchanges, a DEX allows users to trade directly with one another without an intermediary. Its native token, HYPE, plays a crucial role in its ecosystem. With a market capitalization of $12.7 billion, HYPE is currently ranked as the 16th largest digital asset.
Building on Previous Success
The push for more altcoin ETFs is fueled by the unprecedented success of spot Bitcoin funds approved in early 2024. These products have attracted enormous capital inflows, fundamentally changing how traditional investors access the cryptocurrency market.
Data shows that spot Bitcoin ETFs have had the most successful launch in the industry's history, accumulating over $155 billion in assets under management. Ethereum ETFs, which received approval later in the year, have also seen impressive growth, now managing more than $23.4 billion.
Market Performance of HYPE
At the time of the filing, the HYPE token was trading at approximately $47.55. This represents a 2.7% increase over the previous 24 hours and a significant gain of over 32% in the past week, indicating strong recent market performance.
These funds have effectively created a bridge between traditional finance and the world of digital assets. They allow investors to gain exposure through a familiar, regulated vehicle that trades on major stock exchanges, eliminating the technical hurdles and security concerns associated with direct ownership of cryptocurrencies.
The Competitive Landscape Heats Up
21Shares is not the first to seek approval for a Hyperliquid ETF. Asset manager Bitwise submitted its own proposal for a similar fund in September, setting the stage for a competitive race to market should the SEC grant approval. The presence of multiple applicants for the same underlying asset often signals strong perceived demand from investors.
The filing from 21Shares included standard risk disclosures, cautioning potential investors about the nature of the underlying asset.
"HYPE is a digital asset. Like all digital assets, buying, holding and selling HYPE is very different from buying, holding and selling more conventional investments like stocks and bonds," the document stated.
This language underscores the ongoing effort by issuers to educate both regulators and the public about the unique characteristics and volatility inherent in the cryptocurrency market. As asset managers continue to innovate, the financial industry is watching closely to see how the SEC will approach this new generation of digital asset products.
