HYPE prices surge as 21Shares launches its groundbreaking Hyperliquid ETF.

21Shares announced it will list the Hyperliquid spot ETF, ticker symbol THYP, on the Nasdaq on May 12, 2024. This product will provide clients of brokerage firms with legal access to the native Token of the Hyperliquid perpetual exchange network.

This fund is structured as a grantor trust, not a fund under the 1940 Act. This allows the issuer to Staking their HYPE holdings to receive rewards while retaining passive access to the Token 's price.

21Shares launches Hyperliquid spot ETF on Nasdaq, with built-in Staking functionality.

21Shares charges an annual management fee of 0.30%, payable in HYPE. Custody is handled by Anchorage Digital Bank and BitGo Bank & Trust. Both entities use Cold Storage and have insurance against theft and fraud up to $350 million.

This trust can Staking between 30% and 70% of the HYPE supply through Figment Inc. The issuer also has the right to decide to raise this level up to a maximum of 100%.

Staking rewards will be Chia approximately 70% to the trust and 30% to the service provider.

The fund's buyback and redemption lots are executed in physical units, in packages of 10,000 shares, and are only available to authorized members. The fund tracks the FTSE Hyperliquid Index as a price benchmark.

Following this news, Hyperliquid's HYPE Token surged and is trading at $42,071 at the time of writing.

Risks and the race for HYPE spot ETFs

The fund's prospectus clearly outlines the potential risks. The fund warns that HYPE is not suitable for investors who cannot tolerate losing all Capital, as HYPE has an annual volatility of over 126%.

Other risks mentioned include: penalties for being removed from validator status, Staking lock-up periods of 1 to 7 days, and the possibility of Capital delays.

21Shares has also launched its HYPE 2x leveraged product, ticker symbol TXXH, which began trading on April 30, 2024. Competitors such as Bitwise and Grayscale have also filed applications to launch HYPE spot ETFs with ticker symbols BHYP and GHYP to compete in the market.

This launch follows months of strong growth in perpetual volume on Hyperliquid. The initial influx of funds into THYP will signal how traditional investors are assessing the platform's potential.