21Shares Files for First U.S. Leveraged DeFi ETF, 2x HYPE
21Shares has filed with the U.S. Securities and Exchange Commission (SEC) for a novel 2x HYPE ETF, designed to track the daily returns of the Hyperliquid Index with a leveraged structure. This marks the first such product in the U.S. to focus on a live decentralized protocol.
The 2x HYPE ETF, expected to have a capacity ranging from $500 million to $1.5 billion, aims to provide double the daily returns of the Hyperliquid Index. It will use swaps to replicate performance and avoid direct token custody, employing a traditional regulated structure with daily resets.
The filing comes amidst a surge in interest in on-chain finance within traditional markets. Several prominent asset managers, such as Bitwise and VanEck, have also submitted applications for Hyperliquid-linked ETFs. This trend reflects the growing appeal of decentralized protocols to institutional investors.
The potential of the 2x HYPE ETF was bolstered by Hyperliquid's strongest revenue month to date, driven by rising protocol fees and user activity. The recent HIP-3 upgrade, which introduced permissionless perpetual market creation, has also expanded HYPE's utility and appeal. Additionally, 21Shares' listing of the HYPE ETP on the SIX Swiss Exchange has enabled institutional investors to gain exposure without blockchain interaction.
The 2x HYPE ETF, if approved, could attract investors seeking increased returns associated with on-chain trading, designed for short-term tactical trades. It is expected to further open up the decentralized finance (DeFi) space to traditional investors, reflecting the evolving landscape of financial markets.
