21Shares Moves Deeper into Decentralized Finance with New ETF Proposal
21Shares is making significant strides in the decentralized finance (DeFi) space by proposing a new ETF linked to the Hyperliquid blockchain and its associated token, HYPE.
Key Highlights
21Shares has submitted a Form S-1 to the U.S. Securities and Exchange Commission (SEC) aimed at launching the Hyperliquid ETF, which would provide investors with exposure to the HYPE token. Currently, HYPE ranks as the 16th largest cryptocurrency and serves as the backbone of Hyperliquid, a Layer 1 blockchain designed specifically for DeFi applications. This proposal comes on the heels of an uptick in crypto ETF launches from various firms, including Grayscale and Bitwise. Additionally, metrics within the DeFi landscape are showing signs of resurgence, with Hyperliquid experiencing a nearly 10% increase in total value locked over just one week.
What Occurred?
On October 29, 2025, 21Shares filed a Form S-1 registration with the SEC, proposing the establishment of the 21Shares Hyperliquid ETF. If the proposal receives approval, this fund would facilitate regulated access to the Hyperliquid ecosystem and its native HYPE token. The filing also identifies Coinbase Custody Trust Company and BitGO Trust Company as custodians for the ETF. This announcement coincides with a renewed wave of interest from institutional investors in the crypto sector, along with several other recent ETF filings.
21Shares Expands Amid Rising Crypto ETF Interest
As one of the largest managers of exchange-traded products, 21Shares is strategically positioning itself as a pivotal player in the evolving landscape of crypto finance. The Hyperliquid ETF proposal follows a similar application submitted by Bitwise earlier in the year and adds to a flurry of activity in October, during which multiple firms, including REX Shares and Osprey Funds, put forth more than twenty ETF-related proposals. This filing also comes shortly after FalconX announced its acquisition of 21Shares, a partnership expected to merge FalconX’s trading capabilities with 21Shares’ expertise in exchange-traded products, potentially expanding the range of derivative and structured crypto offerings. Recent regulatory changes have expedited ETF filings, with the SEC providing guidance that permits firms to launch ETFs 20 days after the filing, provided no delaying amendments are submitted. Furthermore, three exchanges had previously approved listing standards, easing the launch process for crypto-focused funds.
Hyperliquid’s Strength in DeFi Boosts Appeal
Hyperliquid has gained recognition for its robust trading infrastructure, particularly in the area of derivatives, and is currently offering impressive returns. Data from RR2 Capital indicates that the protocol’s liquidity provider vault has an annual percentage rate (APR) of 160%, surpassing other decentralized exchanges in the perpetuals market. Concurrently, the overall metrics of decentralized finance are indicating a recovery, with thirteen blockchain networks each maintaining over one billion dollars in total value locked (TVL). Notably, Hyperliquid’s TVL increased by 10.9% in just a week, marking the highest growth among major platforms and demonstrating growing confidence in DeFi protocols.
Price Momentum Aligns With Market Optimism
The HYPE token has seen a significant rebound from its October lows of approximately $33, a recovery influenced by both technical and fundamental drivers. Analysts have observed a classic cup-and-handle chart pattern, often interpreted as a bullish indicator. With $45 identified as a critical support level and $49 as a breakout point, analysts now forecast potential targets approaching $60 if the upward buying momentum continues. The filing for the 21Shares ETF enhances market sentiment, aligning institutional interest with the increasing enthusiasm from retail investors. Additionally, Robinhood has recently integrated Hyperliquid into its trading platform, further enhancing exposure and liquidity in U.S. markets.
CoinLaw’s Insight
From my perspective, a timely ETF filing can significantly bolster confidence in any digital asset. What stands out in this instance is that 21Shares is not merely introducing a new fund but is doing so amid a broader institutional movement toward DeFi. With Hyperliquid showcasing strong fundamentals, a notable increase in TVL, and substantial yield opportunities, it’s no surprise that HYPE is gaining traction among both retail and institutional investors. The combination of technical price indicators and actual usage metrics is particularly noteworthy. This ETF could serve as a vital link, potentially ushering traditional capital further into the realm of decentralized finance.
