Nasdaq Files for Listing Ethereum ETF from Brazilian Asset Manager
The Nasdaq stock exchange has submitted a filing to the Securities and Exchange Commission (SEC) to list an Ethereum exchange-traded fund (ETF) from Brazilian asset manager Hashdex. The proposed ETF, called the Hashdex Nasdaq Ethereum ETF, aims to hold both spot ether and futures contracts. Toroso Investments, registered as a commodity pool operator with the Commodity Futures Trading Commission and a member of the National Futures Association, will manage and control the fund.
Futures Contracts vs Spot Funds
A key consideration for crypto ETF applications is whether they plan to hold futures contracts or spot funds. While the SEC has approved ETFs that hold futures contracts, it has not yet approved those that hold spot funds. As a result, fund managers are now opting for a middle-of-the-road approach. The Hashdex ETF will invest in ether, ether futures contracts listed on the CME, cash, and cash equivalents to mitigate concerns about price manipulation in the spot market.
Investment Objective of the Hashdex Fund
The investment objective of the Hashdex Nasdaq Ethereum ETF is for its shares to reflect daily changes in the price of the Nasdaq Ether Reference Price. The fund plans to achieve this by investing in a mix of Spot Ether, Ether Futures Contracts, and cash. According to Nasdaq’s 19b-4 form filing, this approach reduces dependence on the spot market and addresses concerns about potential manipulation in unregulated Ether spot exchanges. Instead, the fund will rely on regulated exchanges such as CME Market that provide higher transparency and oversight.
Hashdex’s Stance on Regulation
Hashdex’s CEO and co-founder Marcelo Sampaio has emphasized their collaborative approach with regulators. He referred to Grayscale Investments, which successfully sued the SEC after its spot bitcoin ETF plans were rejected. Sampaio believes that a spot Bitcoin ETF is inevitable, but the timing and context are uncertain.
Spot Ether ETF Applications
Last week, Ark Invest and 21Shares applied for a spot ether ETF with the SEC, joining VanEck in seeking approval for such a fund. However, the SEC has delayed decisions on all filings it has received for spot crypto funds.
Hot Take: The Growing Demand for Crypto ETFs
The filing of an Ethereum ETF by Hashdex on the Nasdaq stock exchange highlights the increasing demand for cryptocurrency exchange-traded funds. Fund managers are exploring different approaches to address regulatory concerns and provide investors with exposure to digital assets. While the SEC has been more open to approving ETFs that hold futures contracts, there is still uncertainty surrounding spot funds. As more applications are submitted and decisions are delayed, it remains to be seen when a spot Bitcoin or Ether ETF will be approved. Nevertheless, industry participants are optimistic about the eventual launch of these products.
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