Asset Manager Hashdex Meets with SEC to Address Concerns about Bitcoin ETF
Hashdex, an asset manager, recently had a meeting with the United States Securities and Exchange Commission (SEC) to discuss the regulator’s concerns regarding its application for the Hashdex Bitcoin Futures exchange-traded fund (ETF) to hold spot Bitcoin. The meeting took place on October 13 and involved six SEC officials, as well as representatives from Hashdex, NYSE Arca, Tidal Financial Group, and law firm K&L Gates.
Presenting the Mechanism for Spot Bitcoin Trading in the ETF
During the meeting, Hashdex presented its mechanism for allowing spot Bitcoin to be traded and held in the ETF on the Chicago Mercantile Exchange (CME), which is regulated by the Commodity Futures Trading Commission. Unlike other spot Bitcoin applications, Hashdex does not have a surveillance-sharing agreement with Coinbase. Instead, it proposes acquiring spot BTC from physical exchanges within the CME market, relying entirely on CME pricing for transactions.
Building on Teucrium Order and Next Steps
The presentation shared with SEC officials highlighted that Hashdex’s strategy aligns with the commission’s Teucrium Order, which states that the Bitcoin futures market is developed enough to support financial products seeking exposure to BTC. The SEC may request more information before the application’s first deadline on November 17.
Hashdex’s Background and Approval Status
Hashdex manages over $380 million in assets and has 14 exchange-traded products (ETPs) across seven countries. The SEC approved Hashdex’s Bitcoin Futures ETF in April 2022, which has been listed on NYSE Arca since September of that year. If the rule change is approved, the ETF will be able to hold spot Bitcoin as well.
Race to List the First Spot Bitcoin ETF
Multiple asset managers are competing to list the first spot Bitcoin ETF in the United States. BlackRock’s ETF proposal was recently listed on the Depository Trust & Clearing Corporation (DTCC), indicating potential approval. There is a consensus view that the SEC will approve all spot ETFs within three months.
Hot Take: Increasing Momentum for Spot Bitcoin ETF Approvals
The meeting between Hashdex and the SEC demonstrates the ongoing efforts to address regulatory concerns regarding spot Bitcoin ETFs. With multiple asset managers vying to list such products, including BlackRock’s recent proposal, there is increasing momentum for the approval of spot Bitcoin ETFs in the United States. As the SEC reviews Hashdex’s application and potentially requests more information, it remains to be seen how soon these ETFs will be available for investors. However, industry insiders are optimistic that approvals could come within the next three months.
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