21Shares submits Hyperliquid ETF application, institutional alts ETF explosion in progress

The asset management company 21Shares submitted an S-1 registration application for the Hyperliquid (HYPE) Spot ETF to the U.S. Securities and Exchange Commission (SEC) on October 29, 2025, joining mainstream Financial Institutions like Bitwise and VanEck in the altcoin ETF race. This move signifies that institutional investment is accelerating beyond Bitcoin and Ethereum, shifting towards a broader encryption ecosystem. This action comes against the backdrop of Bitwise's Solana ETF (BSOL) setting a new record for first-day trading volume for a new ETF in 2025, highlighting the strong demand for regulated altcoin products.

Institutional Landscape Expansion: 21Shares Targets Hyperliquid (HYPE) Spot ETF

As the encryption market matures and the regulatory environment becomes clearer, institutional interest in digital assets is diversifying at an accelerated pace. Asset management company 21Shares has submitted an S-1 registration statement to the SEC, planning to launch an exchange-traded fund (ETF) that tracks the price of Hyperliquid's native token HYPE.

The new application from 21Shares is the latest example in the wave of altcoin ETF applications for 2025, clearly demonstrating the growing demand from institutions for regulated cryptocurrency exposure. The product aims to passively track the price of HYPE tokens, without involving speculative trading, leverage, or the use of derivatives. According to the documents, the trust is a passive investment tool, and its goal is not to generate returns beyond tracking the price of HYPE tokens. Mainstream CEX Custody and BitGo Trust Company will act as custodians, responsible for the secure storage of the fund's digital assets.

Staking strategy taken into account: Improve asset utilization rate

It is worth noting that 21Shares mentioned in the document that it may explore staking its held HYPE to generate rewards, but this must be done in compliance with legal and tax regulations. They stated that although the trust can stake up to 100% of its HYPE holdings, it generally intends to stake 70% to 90% of its holdings based on “utilization analysis.” This means that 21Shares is actively exploring how to improve the capital efficiency and potential returns of ETF assets through staking mechanisms, which is an important development trend in the encryption ETF field.

Competitive Landscape: Bitwise and VanEck are both positioning for HYPE

21Shares is not the only institution laying out plans for a HYPE ETF. Previously, Bitwise also submitted a similar ETF application last month. In addition, VanEck hinted at plans to launch a HYPE ETF in the US and Europe, and may also include staking features. The collective actions of these three heavyweight asset management companies undoubtedly highlight Hyperliquid's importance and institutional recognition in the emerging blockchain ecosystem.

Altcoin ETF Demand Soars: Market Enthusiasm Rises

21Shares' latest application comes at a time when demand for altcoin products is unprecedentedly high in the market. As of the end of October, the SEC is reviewing over 150 such applications. Investor enthusiasm for altcoin ETFs is fully reflected in the products that debuted this week:

• Bitwise Solana ETF (BSOL) Record: On October 28, 2025, Bitwise's Solana ETF (BSOL) made its debut, achieving a first-day volume of $56 million, marking the strongest debut among all new ETFs in 2025. The following day, the volume further climbed to $72 million, indicating sustained interest.
• Hedera and Litecoin ETFs perform steadily: Canary Capital's Hedera ETF (HBR) and Litecoin ETF (LTCC) also debuted on October 28. HBR's first-day volume reached $8 million, while LTCC was $1 million. Bloomberg's senior ETF analyst Eric Balchunas pointed out that these funds maintained trading levels close to their first day on the second day, which “is still strong,” as most ETFs see a drop in volume after the initial hype.

The surge in applications and issuances of this ETF marks that the encryption market is maturing, and regulated encryption products are attracting increasing attention. As major issuers expand their business scope beyond Bitcoin and Ethereum, investor demand is clearly shifting towards broader exposure to emerging blockchain ecosystems.

Conclusion

21Shares submitted an application for the Hyperliquid ETF, reflecting a shift in institutional investors' strategies in the encryption market, moving from single-asset investments (Bitcoin, Ethereum) to diversified, growth-oriented emerging blockchain projects. With more and more altcoin ETFs being approved for listing, such as the impressive performance of the Solana ETF, it indicates a strong demand in the market for regulated digital asset products. This trend not only provides investors with a richer array of encryption exposure options but also enhances the overall transparency, liquidity, and institutional participation in the encryption market, signaling that crypto assets will accelerate their integration into the mainstream financial system.