21Shares Files to Launch Spot Hyperliquid ETF with SEC

21Shares US LLC has filed an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) to register the 21Shares Hyperliquid ETF. This digital asset fund is intended to track the market price of HYPE, the native token of the Hyperliquid blockchain network.

The fund, structured as a grantor trust, will issue shares representing direct ownership of HYPE held by institutional custodians and will not employ leverage or derivative products.

According to the filing, the Hyperliquid ETF is a passive investment vehicle that seeks to mirror the U.S. dollar performance of HYPE using a designated pricing benchmark compiled from major trading venues. According to the filing, the trust “will not utilize leverage, derivatives, or any similar arrangements” in pursuing its objective.

Hype Holdings Staking Arrangements

The filing allows the sponsor to stake a portion of the trust’s HYPE holdings if it determines that staking can be conducted without legal or regulatory complications. Any staking rewards earned would be reflected in the trust’s value. 21Shares may engage third-party staking providers or consider liquid staking tokens, provided such instruments qualify as beneficial ownership of the underlying HYPE for U.S. tax purposes.

All digital assets will be held by Coinbase Custody Trust Company, LLC, and BitGo Trust Company, Inc., which have been designated as HYPE Custodians. The sponsor, 21Shares US LLC, oversees operations, while CSC Delaware Trust Company acts as the trustee.

Authorized Participants and Custody Framework

The S-1 filing details the participation process for Authorized Participants (APs), financial entities permitted to create or redeem ETF shares. APs can initiate transactions either in cash or in-kind, with all HYPE-related purchases and redemptions handled through designated HYPE counterparties. These third-party firms are vetted by the sponsor based on financial stability, regulatory compliance, and settlement performance.

Cash-based transactions require APs to deposit funds into the Trust’s account, prompting the Counterparty to purchase an equivalent value of HYPE and transfer it to the ETF’s custodian. Conversely, in-kind transactions allow APs to deliver HYPE directly to the Trust in exchange for ETF shares.

Listing and Regulatory Status

Adding to this sentiment, the ETF’s shares are expected to be listed on a national securities exchange under a ticker, which will be announced, pending regulatory approval. The Trust has also designated 21Shares as the Sponsor and initial seed investor, providing early funding to establish the vehicle’s operational structure.

The filing clarifies that the Trust is not registered under the Investment Company Act of 1940 and will not be regulated as an investment company or commodity pool. Accordingly, investors will not receive the protections associated with registered investment or futures funds. 

21Shares Hyperliquid filing comes hours after other altcoin-related ETFs, including the Bitwise Solana Staking ETF (BSol) and Canary’s Litecoin (LTCC) and Hedera (HBR) ETFs launched in the U.S. While the BSOL recorded a first-day trading volume of $56 million, LTCC and HBR managed $1 million and $8 million in trading volumes, respectively.