Asset manager 21Shares has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) for an exchange-traded fund (ETF) designed to track HYPE, the native token of the Hyperliquid decentralized exchange. The filing joins a queue of more than 90 other altcoin ETF applications currently under review, signaling a significant shift in institutional interest beyond Bitcoin and Ethereum.

The proposed 21Shares Hyperliquid ETF aims to offer investors regulated exposure to the HYPE token without the complexities of direct asset ownership. To ensure security and compliance, the fund plans to use established industry players Coinbase and BitGo as custodians for the underlying assets.

The Role of HYPE and Hyperliquid

Hyperliquid is a decentralized exchange that specializes in perpetual futures trading, allowing users to trade various digital assets directly from their wallets. The HYPE token is integral to its ecosystem, serving functions related to governance, staking, and transaction fees. The token has demonstrated strong market performance, recently trading at $47.55 after a 32% gain over the previous week.

According to data from CoinGlass, HYPE currently holds a market capitalization of $12.7 billion, ranking it as the 16th largest digital asset by that measure. The ETF filing notes that digital assets like HYPE have unique market dynamics and volatility compared to traditional investments, a risk the fund structure is designed to manage for investors.

A Broader Push for Crypto ETFs

The 21Shares application is part of a much larger trend. Following the successful launch of spot Bitcoin and Ethereum ETFs, fund managers are now seeking to list products for a wide range of other cryptocurrencies, including Solana, Cardano, XRP, and Dogecoin. This surge is fueled by a more supportive political climate and overwhelming investor demand for regulated crypto products.

The success of existing funds has set a powerful precedent. Spot Bitcoin ETFs, which had the most successful debut in the industry’s 32-year history, now manage over $155 billion in assets. Ethereum funds have also attracted significant capital, holding $23.4 billion. These figures highlight strong investor appetite for accessing the crypto market through traditional stock exchanges, which eliminates the technical challenges of wallet management and self-custody.

As the SEC reviews the growing list of altcoin ETF proposals, the outcome of the 21Shares filing could influence the trajectory for many other digital assets seeking to enter mainstream investment portfolios. A potential approval would not only unlock new opportunities within the Hyperliquid ecosystem but also further bridge the gap between traditional finance and blockchain technology.