If approved, the crypto ETF would be the first of its kind, but likely not the last.
Hashdex Files with SEC for Combined Bitcoin and Ether ETF
Hashdex has submitted a proposal to the United States Securities and Exchange Commission (SEC) on June 18 to establish a combined spot Bitcoin (BTC) and Ether (ETH) exchange-traded fund (ETF) on the Nasdaq exchange.
The proposed ETF would balance the crypto assets based on their market capitalizations, which as of May 27 were 70.54% Bitcoin and 29.46% Ether. The fund would follow a passive investment strategy, tracking the daily market movements of the Nasdaq Crypto US Settlement Price Index without attempting to outperform it.
Analyst Insights and ETF Strategy
According to analyst James Seyffart, a combined-asset ETF “makes a lot of sense.” The ETF would focus solely on BTC and ETH. However, the filing notes:
“In the event that any other crypto asset is included (other than bitcoin or ether), or is eligible for inclusion as an Index Constituent […], the Sponsor will transition the Trust’s investment strategy […], with only bitcoin and ether in the same proportions determined by the Index.”
Crypto assets could be included if they meet criteria such as being listed on a U.S.-regulated digital asset trading platform or serving as the underlying asset for a derivative instrument listed on a U.S.-regulated derivatives platform.
Custodians and Innovation in ETF Structures
Coinbase and BitGo will act as custodians for the BTC and ETH assets, offering segregated accounts for individual shareholders.
Brazil-based investment manager Hashdex has previously filed with the SEC to create an ETH ETF but later withdrew the application. Its indexed crypto ETF traded in Brazil includes nine coins, with BTC and ETH making up nearly 92% of the value. Its U.S.-traded spot BTC ETF incorporates up to 5% BTC futures contracts and acquires the spot asset on the CME.
Source: James Seyffart
SEC Approval Process
Hashdex must file and receive SEC approval on an S-1 application. The SEC has 90 days to respond to the 19b-4 filing, during which it will accept comments from the public and other financial institutions. A final SEC decision on the fund is expected no later than March 2025.
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