Hashdex’s innovative proposal to the US Securities and Exchange Commission (SEC) involves a combined spot ETF for Bitcoin and Ethereum. Named “Hashdex Nasdaq Crypto Index US ETF,” this ETF allows investors to directly invest in the two leading cryptocurrencies. This marks a significant step towards general crypto acceptance.
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Insight into the Bitcoin and Ethereum Spot ETF
From the recently filed 19b-4 application, it is revealed that Hashdex plans to combine Bitcoin and Ethereum in an ETF that trades exclusively in fiat currency. The asset manager’s passive investment strategy aims to track the Nasdaq Crypto US Settlement Price Index (NCIUSS) without exceeding the index. This approach simplifies the process for investors, appealing to both experienced traders and newcomers.
To secure the custody of Bitcoin and Ethereum holdings, the ETF plans to utilize Coinbase and BitGo. Additionally, the application specifies that the index components and their weighting will be 70.54% BTC and 29.46% ETH on May 27, 2024. Hashdex’s innovative approach aligns with other potential Ethereum ETF issuers who also will not be using Ethereum staking.
The SEC now has 90 days to review the proposal, with a final decision expected by March 2025. Bloomberg Intelligence ETF Analyst James Seyffart commented on Hashdex’s submission, highlighting the market capitalization-weighted structure and the potential inclusion of other SEC-approved digital assets.
Skepticism in the Crypto Community and Defense of the Approach
Despite Hashdex’s innovative approach, skepticism emerged in the crypto community regarding the idea of combining Bitcoin with other digital assets in an ETF. James Seyffart, however, defended the strategy, emphasizing that the ETF structure makes sense for those seeking diversified exposure to digital assets.
The crypto market is eagerly awaiting the final approval of the first Ethereum spot ETFs. SEC Chairman Gary Gensler hinted that these ETFs could be approved sometime during the summer, although no specific timeline for their trading debut was provided. Bloomberg Intelligence ETF Analyst Eric Balchunas predicted that the funds could potentially start trading as early as July 2.
Overall, Hashdex’s proposal for a combined Bitcoin and Ethereum spot ETF represents an interesting development in the realm of cryptocurrency ETFs. The SEC’s decision is eagerly anticipated as it could signify another milestone for the acceptance and trading of cryptocurrencies in traditional investment vehicles.
