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.
Additionally, passive ETFs usually disclose their holdings on a daily basis, offering investors clear insight into the fund’s assets. They are also known for their tax efficiency, as lower portfolio turnover generally leads to fewer capital gains taxes.
Furthermore, 21Shares disclosed that it may explore alternative methods for engaging in staking activities, specifically through liquid staking protocols (LSPs). These protocols allow for the issuance of a freely tradeable digital token, known as a “Liquid Staking Token,” which represents the HYPE staked with the protocol.
Additionally, HYPE has been among the top performers since its launch back in November 2024, with a major 1,140% surge since its market debut, with a market cap nearing the $13 billion market capitalization.
The SEC is currently operating with limited staff due to a government shutdown, which has slowed down the review process. In September, the agency did remove the last significant barrier for several new spot ETFs linked to various cryptocurrencies, paving the way for potential future approvals.
Despite the Hyperliquid ETF application, the HYPE token has failed to react positively to the news with a 2% drop toward $46 in the 24-hour time frame. This puts the token 20% below its record peak of $59 reached earlier this year.
Featured image from DALL-E, chart from TradingView.com
