21Shares Pushes DeFi Toward Wall Street With HYPE ETF Proposal
21Shares files with the SEC to launch the HYPE ETF, bridging institutional investing with the Hyperliquid DeFi ecosystem.
In a landmark move that could further blur the lines between decentralized finance and traditional markets, 21Shares has filed with the U.S. Securities and Exchange Commission (SEC) to launch the HYPE ETF — a regulated fund designed to mirror the performance of the Hyperliquid token without requiring direct token ownership.
The proposed fund, according to the S-1 registration filed this week, would use derivatives such as swaps and options to replicate the price and staking rewards of Hyperliquid’s native token. This would allow institutional investors to gain exposure to one of DeFi’s most dynamic ecosystems while remaining within the protective framework of regulated securities.
21Shares, already known for pioneering exchange-traded crypto products in Europe and the United States, described the ETF as a bridge between on-chain innovation and Wall Street. If approved, the fund would mark one of the first instances where a decentralized perpetual trading protocol is integrated into a traditional investment vehicle.
Hyperliquid, the blockchain network behind the HYPE token, has processed more than $3 trillion in cumulative trading volume and boasts a fee-free, high-liquidity environment. The system’s automated market maker supports perpetual contracts with deep liquidity and efficient execution — qualities that have made it increasingly appealing to professional traders.
For institutions, the appeal lies in exposure without the complexities of custody, wallets, or on-chain compliance. By packaging HYPE’s price movements and rewards into a traditional ETF format, 21Shares aims to simplify access for pension funds, hedge funds, and asset managers seeking DeFi-linked returns. Data from SoSoValue shows that institutional demand for crypto ETFs is surging, with U.S. Bitcoin and Ethereum spot ETFs attracting over $5.4 billion in net inflows in October alone.
The HYPE ETF is not 21Shares’ only bet on Hyperliquid. Earlier this month, the company also filed for a leveraged version designed to deliver twice the daily returns of the Hyperliquid Index. While potentially lucrative, that product faces higher risks tied to counterparty exposure and market volatility — making it suitable mainly for seasoned institutional traders.
Analysts see the filing as a reflection of the SEC’s evolving approach to crypto-based funds. Recent policy updates have shortened review timelines to 75 days, accelerating the pace of innovation in digital asset investment products. If the HYPE ETF receives approval, it could pave the way for a new class of regulated vehicles tied to DeFi protocols beyond Bitcoin and Ethereum.
As traditional and decentralized finance converge, 21Shares’ initiative signals more than a regulatory milestone. It represents a shift toward institutional acceptance of blockchain-based markets — a step closer to integrating DeFi’s efficiency and transparency into mainstream portfolios.
