Core Insights - Swiss-based asset manager 21Shares has filed with the SEC to launch a Hyperliquid ETF, indicating a growing institutional interest in altcoin-linked investment products [1][9] - The proposed ETF will track the HYPE token associated with the Hyperliquid perpetual futures protocol and blockchain, with Coinbase Custody and BitGo Trust listed as custodians [3][4] - The filing comes amid increasing competition among asset managers, as Bitwise has also filed for a similar Hyperliquid ETF, highlighting the demand for decentralized trading ecosystem exposure [4][9] Market Trends - The HYPE token has seen a steady price increase this year, reflecting the rising trading volume and user base of the Hyperliquid protocol [5] - Recent launches of altcoin-based ETFs, such as Bitwise's Solana Staking ETF, which recorded $72 million in trading volume on its second day, demonstrate strong market interest [5][6] - Grayscale's entry with the Grayscale Solana Trust ETF also indicates a competitive landscape, with its first-day trading volume of $4 million being considered healthy [6] Regulatory Environment - The SEC's review of 21Shares' Hyperliquid ETF will be crucial in determining the addition of another altcoin-focused product to the growing list of US-listed crypto ETFs [7]

Core Insights - 21Shares has filed for an exchange-traded fund (ETF) that will track the token of the Hyperliquid decentralized exchange, indicating a growing interest in crypto-focused investment products [1][2] - The proposed 21Shares Hyperliquid ETF would be the second HYPE-focused ETF in the U.S. market, following a similar proposal by Bitwise [2] - The SEC is currently reviewing over 90 applications for crypto-focused ETFs, which include various altcoins and strategies [3] Company and Product Details - Hyperliquid is a decentralized exchange specializing in perpetual futures trading, and the ETF would provide investors exposure to its native token, HYPE, which has a market capitalization of $12.7 billion [4] - HYPE is currently trading at $47.55, reflecting a 2.7% increase in the last 24 hours and over 32% in the past week [5] Market Context - Asset managers are responding to strong demand for crypto-focused products, supported by a more favorable political and regulatory environment for digital assets [6] - Bitcoin-focused funds have achieved significant success, managing over $155 billion in assets, while Ethereum funds control $23.4 billion, with substantial growth in recent months [7] - These funds have provided traditional investors and institutions with easier access to crypto investments through shares traded on stock exchanges, addressing previous concerns about the complexities and security of direct digital asset ownership [8]

Core Viewpoint - 21Shares US LLC has filed for the "21Shares Hyperliquid ETF," aiming to track the price performance and staking yield of HYPE, the native token of the Hyperliquid network, as part of its expansion into DeFi-focused ETFs [1][2]. Group 1: ETF Structure and Management - The 21Shares Hyperliquid ETF is structured as a Delaware statutory trust, targeting institutional investors for exposure to HYPE's market performance and staking rewards, while minimizing management fees and liabilities [2]. - Coinbase Custody and BitGo Trust will act as custodians for secure cold storage of the fund's HYPE holdings [2]. - The ETF will not use leverage or derivatives, instead passively tracking HYPE's price through a benchmark aggregating data from major exchanges [3]. Group 2: Staking and Transaction Mechanism - 21Shares may stake a portion of the fund's HYPE through vetted staking providers or liquid staking tokens, contingent on regulatory clarity [3]. - The ETF's shares will be created and redeemed through authorized participants in exchange for HYPE or equivalent cash value [3]. - The inclusion of a "HYPE Counterparty" for transaction facilitation indicates a design akin to existing Bitcoin and Ethereum ETFs [4]. Group 3: Market Context and Future Prospects - If approved, the ETF would be the first US-listed leveraged ETF tracking a live DeFi protocol, utilizing derivatives instead of direct token holdings [5]. - Earlier in October, 21Shares also filed for a spot Injective (INJ) ETF, indicating a broader strategy in the DeFi space [5]. - HYPE is currently trading around $49.38, with technical indicators suggesting potential bullish momentum, which could position HYPE as a strong investment opportunity in 2025 [6][7].