On Wednesday, 21Shares, the world’s largest issuer of cryptocurrency exchange-traded products (ETPs), filed a regulatory filing. presentation with the US Securities and Exchange Commission (SEC), seeking approval to launch a passive Hyperliquid ETF designed to track the price of the HYPE token.
21Shares Passive Hyperliquid ETF
Passive exchange-traded funds, like the one proposed by 21Shares, are structured to track the performance of a specific index or asset by holding it in consistent proportions, rather than actively selecting and managing investments.
This passive management approach It typically results in lower expense ratios and reduced management fees since a highly compensated portfolio manager is not required to make frequent trading decisions.
Additionally, passive ETFs typically disclose their holdings on a daily basis, giving investors a clear view of the fund’s assets. They are also known for their tax efficiency, as lower portfolio turnover generally leads to less capital gains taxes.
In its Hyperliquid ETF filing, 21Shares announced that it has selected Coinbase (COIN) and BitGo as custodians of the Hyperliquid ETF. The Trust will hold the HYPE token and evaluate its value daily based on a specific price benchmark.
Additionally, 21Shares revealed that it may explore alternative methods of participating in staking activities, specifically through liquid staking protocols (LSP). These protocols allow for the issuance of a freely tradable digital token, known as a “Liquid Staking Token,” which represents the HYPE staked with the protocol.
The youngest crypto asset to seek ETF approval
Notably, the ADVERTISING HYPE token is the youngest cryptocurrency asset to have an ETF application filed to date, underscoring the growing interest of money managers and institutions in gaining exposure to these digital assets.
Furthermore, HYPE has been among the best performers since its launch in November 2024, with a significant increase of 1,140% since its market debut, with a market capitalization close to $13 billion market capitalization.
The US Securities and Exchange Commission (SEC) has received a wave of ETF filings related to cryptocurrencies such as solarium (SOL), XRP and Dogecoin (DOGE), as demand continues to increase throughout the year. However, it is important to note that the approval process for these numerous crypto ETF applications is still pending.
The SEC is currently operating with limited staff due to the government shutdown, which has slowed the review process. In September, the agency removed the last major barrier for several new spot ETFs linked to various cryptocurrencies, paving the way for potential future approvals.
Despite the Hyperliquid ETF filing, the HYPE token did not react positively to the news with a 2% drop to $46 in the 24-hour period. This puts the token 20% below its record high of $59 reached earlier this year.
Featured image of DALL-E, chart from TradingView.com
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