21Shares Hyperliquid ETF IPO – What You Need to Know

Hey there! Thinking about investing in the 21Shares Hyperliquid ETF IPO? Let’s break it down in plain English so you know exactly what you’re getting into.

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1. What’s this ETF even about?

The company didn’t provide clear details about the ETF’s strategy or target market in their filing. This lack of transparency is something to consider.

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2. How do they make cash? (And are they doing well?)

No specifics were shared about revenue streams or financial performance. This makes it hard to evaluate their business model.

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3. What’s the IPO money for?

The filing doesn’t explain how they’ll use investor funds. When companies aren’t clear about this, it’s often a red flag.

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4. Biggest risks? Don’t sugarcoat it.

• Staking limbo: They might never enable staking rewards due to tax/legal risks.
• Unlocking delays: Need to sell HYPE quickly? Staked tokens could be stuck in “timeout” for days.
• Concentration danger: A few big players control most HYPE – and some wallets might secretly belong to the same entity. If these whales sell, prices could crash like a Jenga tower.
• Custodian safeguards have loopholes:
  • Coinbase’s “insurance” isn’t bulletproof: If they lose your HYPE, their liability is limited – like having a fire extinguisher that only works half the time.
  • BitGo’s “oops” protection: Only fully liable for fraud or extreme negligence. Regular mistakes? Max payout = last year’s fees or lost assets.
  • Prime Broker fine print: Liability capped at $5 million or 12 months of fees – bad news if a major hack happens.
  • Bankruptcy black hole: If Coinbase/BitGo go under, your HYPE could get stuck in legal limbo (like trying to get luggage back from a bankrupt airline).
  • Switching custodians is risky: Imagine changing pilots mid-flight.
• Regulatory crackdowns:
  • New laws like the GENIUS Act (passed July 2025) could reclassify HYPE as a "security" overnight.
  • States like New York require special licenses – Hyperliquid might get banned in parts of the U.S.
  • Privacy features could attract stricter rules (e.g., the CANSEE Act).
• The slow leak: Your ETF shares lose value daily as fees eat into HYPE holdings – like a bucket with a tiny hole.
• Too much competition: If multiple HYPE ETFs get approved, this one could get lost in the crowd.
• Network traffic jams: Transactions slow down during peak times – could cost you money if prices swing.
• Value mismatch: The ETF’s internal accounting might not match real HYPE prices (like your house appraisal vs. Zillow).
• Total wipeout risk: The filing explicitly warns: “You could lose everything.”

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5. Who’s in charge?

• Crypto muscle: Backed by 21Shares (Europe’s crypto ETF leader since 2018).
• Security guards (with asterisks): HYPE tokens stored with Coinbase and BitGo – but their protections have limits (see Risks).
• Staking mystery: No info about who’ll handle staking or how rewards get split.

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6. Where can I buy it?

The filing doesn’t list approved exchanges or brokers. You’ll need to check post-IPO updates.

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7. Price and shares?

No pricing details or share quantities were disclosed – unusual for an IPO.

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Bottom line:

• This ETF hasn’t been fully approved by regulators yet – the SEC could still reject it.
• Best for crypto veterans comfortable with extreme risk.
• If you need clear financials or asset protection guarantees, look elsewhere.

Red flag alert: The company provided unusually limited information in their filing. In investing, what’s not said can be as important as what is.

Got questions? Drop ’em below! 👇