Nasdaq and Hashdex Collaborate on Ethereum ETF Application
Nasdaq, the well-known stock exchange, has officially submitted a filing to the Securities and Exchange Commission (SEC) in partnership with Brazilian asset manager Hashdex, expressing interest in creating an Ethereum exchange-traded fund (ETF). The proposed ETF, called the Hashdex Nasdaq Ethereum ETF, will be managed by Toroso Investments. Toroso Investments holds a significant position in this venture as a registered commodity pool operator with the Commodity Futures Trading Commission and a member of the National Futures Association.
Combining Futures Contracts and Spot Funds
The unique aspect of this proposed ETF is its plan to include both futures contracts and spot funds. This strategic move is in response to the SEC’s approval of futures contracts while rejecting spot products. The Hashdex fund aims to reflect daily changes in the Nasdaq Ether Reference Price and will invest in ETH, Ether futures contracts listed on the CME, cash, and cash equivalents.
Diversified Holdings for Transparency and Oversight
The Hashdex Nasdaq Ethereum ETF will diversify its holdings across Spot Ether, Ether Futures Contracts, and cash. This approach aims to reduce reliance on the spot market and minimize potential manipulation concerns in unregulated Ether spot exchanges. Instead, the fund will rely on Ether Futures Contracts and Ether futures EFPs traded on the regulated CME Market, ensuring high levels of transparency and oversight.
Hashdex CEO’s Confidence in Future Spot BTC ETF Approval
Hashdex CEO Marcelo Sampaio has expressed his firm’s preference for cooperation with regulators rather than legal action. This was in reference to Grayscale Investments’ lawsuit victory against the SEC after its proposed spot bitcoin ETF was rejected. Sampaio remains optimistic about the eventual approval of a spot Bitcoin ETF, although the timeline and circumstances are uncertain.
Competition for the First US Spot Bitcoin ETF
In addition to the Nasdaq and Hashdex collaboration, Ark Invest and 21Shares have also applied for a spot Ethereum ETF with the SEC. This product would be the first US ETF backed by Ethereum, the second most valuable cryptocurrency. These applications come at a time when there is growing competition to approve the first US spot Bitcoin ETF. While previous rejections have been based on fraud and manipulation concerns, Grayscale Investments’ recent lawsuit victory against the SEC could potentially pave the way for future approvals of such funds.
Hot Take: The Future of Crypto ETFs
The partnership between Nasdaq and Hashdex to create an Ethereum ETF demonstrates the increasing interest in crypto-based exchange-traded funds. By combining futures contracts and spot funds, this ETF aims to navigate regulatory hurdles while providing investors with exposure to Ethereum. The success of this venture, as well as the ongoing applications for spot Bitcoin ETFs, could signal a shift towards greater acceptance and adoption of cryptocurrencies in traditional financial markets.
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