21Shares has filed an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) to launch an exchange-traded fund (ETF) that tracks the price and rewards of the Hyperliquid token (HYPE). If approved by the SEC, the asset manager would expose investors to Hyperliquid’s underlying token without needing to hold HYPE tokens directly.
This marks the latest step by 21Shares in integrating DeFi protocols into regulated investment markets. The proposed ETF has been designed to replicate HYPE’s market activity through derivative financial instruments, including swaps and Options. These allow 21Shares to match HYPE’s on-chain movements within a traditional economic framework.
HYPE ETF could open institutional gateway to on-chain perpetual markets
According to the filing submitted today to the SEC, the 21Shares ETF fund will also consider utilizing spot Hyperliquid exchange-traded products (ETPs) where applicable, to closely track HYPE’s on-chain activity and staking yields. The fund allows institutional investors to gain exposure to HYPE without necessarily holding the underlying token while meeting regulatory and custodial requirements.
The latest filing follows an earlier submission for a 2X Leveraged HYPE ETF, filed on 16th October, to deliver double the daily returns of the Hyperliquid Index using leveraged derivatives. The submission is currently pending approval from the SEC. If approved, 21Shares would become the first asset manager in the U.S. to list a leveraged ETF tracking a DeFi protocol’s perpetual market performance.
Hyperliquid, a L1 blockchain network operating fully on-chain perpetual exchange, has more than $3 trillion in cumulative trading volume. The network design eliminates gas fees and provides deep liquidity via its automated market maker system, enabling institutional trading with high throughput.
The network has also attracted attention from professional investors who seek exposure to decentralized perpetual markets due to its on-chain transparency and scalable infrastructure. By structuring exposure within a regulated ETF, 21Shares may open a gateway for institutional investors to participate in DeFi markets without the technical and custody challenges of on-chain interaction.
SoSoValue data shows that the U.S.-listed spot Bitcoin and Ethereum ETFs collectively accumulated over $5.47 billion in net inflows in October. Bitcoin led the way in inflows, with a total of $4.57 billion over the past month, while Ethereum recorded $933 million during the same period. The rate of institutional capital flow to these ETFs reflects a broad adoption by institutional investors seeking to diversify their balance sheets through regulated crypto exposure.
U.S. policy support and SEC reforms spark a wave of new crypto ETF filings
According to a Cryptopolitan report, the SEC also established generic listing standards for spot crypto ETFs, reducing the review timelines from 240 to 75 days. These regulatory measures, paired with the growing pro-crypto support by the Trump administration, have encouraged asset managers to expand their offerings beyond BTC and ETH to other assets such as Solana, XRP, and the latest Hyperliquid ecosystem.
Leveraged and derivatives-based products carry elevated risks. The 2X Leverage HYPE ETF, despite paving the way for institutional exposure to DeFi markets, may be affected by counterparty exposure in swap contracts and liquidity volatility. In its filing, 21Shares emphasized that the 2X Leveraged HYPE ETF product is made for active traders and institutional desks that manage short-term exposure rather than longer-term ones.
21Shares manages a broad portfolio across the Swiss and European exchanges, with roughly $11 billion in assets under management. Eric Balchunas, an ETF analyst at Bloomberg, described the HYPE filing as ‘niche but potentially scalable’. He noted that similar products have evolved into multi-billion-dollar funds.
The SEC’s review process for the Hyperliquid ETF is now set to determine the qualification of the ETF framework. Furthermore, the leveraged version of the fund filed recently has an effective date of December 20, 2025, while the S-1 filing remains under initial review. 21Shares’ double approach, including a standard and leveraged option, could mark a new way to merge DeFi and TradFi ecosystems if approved.
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