Hashdex Ethereum ETF Aims To Reduce Risks
Brazilian asset management firm Hashdex is seeking approval to launch a unique hybrid Ethereum exchange-traded fund (ETF) that combines spot and futures contracts. The company has submitted an application to the US Securities and Exchange Commission (SEC) via the Nasdaq stock exchange. Unlike traditional ETFs that track the spot price of an underlying asset, this hybrid ETF’s share price may not directly mirror the spot price of Ether due to its investment objective.
Reducing Manipulation Risk
Toroso Investments will manage the fund on behalf of Hashdex. The investment strategy aims to address concerns raised by the SEC regarding manipulation risk associated with spot Ethereum ETFs. Rather than solely holding spot Ether, which can be vulnerable to price manipulation, the fund will maintain a diversified portfolio consisting of Spot Ether, Ether Futures Contracts, and cash.
Investment Limits and Market Impact
The filing outlines specific investment limits for the fund, including capping the amount of spot Ether it can hold in order to reduce manipulation risk. By utilizing both spot and futures contracts, the fund avoids becoming too large in the spot market, thereby minimizing potential market manipulation without affecting the futures market.
Hot Take: Hybrid Ethereum ETF Seeks Approval from SEC
Hashdex is looking to introduce a unique hybrid Ethereum ETF that combines spot and futures contracts. This innovative approach aims to reduce manipulation risk by diversifying holdings and addressing concerns raised by regulatory authorities. While the share price of this ETF may not directly reflect the spot price of Ether, it offers investors exposure to both aspects of Ethereum trading. As this story develops, more information will be provided.
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