Hashdex Files for Ethereum ETF with a Unique Approach
Brazilian asset manager Hashdex has submitted an application to the US Securities and Exchange Commission (SEC) for an Ethereum exchange-traded fund (ETF). The proposed Hasdex Nasdaq Ethereum ETF will consist of futures and spot Ether contracts. If approved, the fund will be managed by Toroso Investments, based in New York.
Hashdex’s Strategy for Spot Ethereum ETF Application
In August, Hashdex filed an application for a Bitcoin spot ETF with a unique approach. Instead of solely relying on spot and futures contracts, the proposed Bitcoin ETF would be secured by Exchange for Physical (EFP) transactions on the Chicago Mercantile Exchange (CME). Following the same strategy, Hashdex plans to offer a spot Ether ETF that includes a mix of Ether future contracts, cash, and other cash equivalents.
Diversification to Address SEC Concerns
The use of diversification aims to reduce the exposure of the proposed Ethereum ETF to crypto market volatility. By combining spot Ether, Ether Futures Contracts, and cash, Hashdex believes it can address the primary concerns of the SEC regarding crypto spot ETFs. The investment restrictions on the ETF will also limit the amount of spot Ether it can hold, maintaining a safe level of influence from the spot market.
Competition in the Spot Ethereum ETF Race
Aside from Hashdex, asset managers Ark Invest and VanEck have also filed applications with the SEC for spot Ethereum ETFs. These applications were submitted by the Chicago Board Options Exchange (Cboe). At present, these three companies are leading the race to offer spot Ethereum ETFs in the US, but more applications may be on the horizon.
Ether’s Current Status
As of now, Ether is trading at around $1,614.47 with a 0.43% gain in the last day. It remains the second largest cryptocurrency, with a market cap value of $194.11 billion.
Hot Take: A New Approach to Crypto ETFs
Hashdex’s unique approach to offering crypto ETFs, combining spot and futures contracts while diversifying with cash equivalents, demonstrates an effort to address regulatory concerns and reduce market volatility. With competition heating up in the race to offer spot Ethereum ETFs, it will be interesting to see which applications gain approval from the SEC. As the popularity of cryptocurrencies continues to grow, these ETFs could provide a regulated investment option for those looking to participate in the crypto market.
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