July 15, 2024
Hashdex Bitcoin and Ether ETF Proposal
Bitcoin ETF

Hashdex Proposes Combined Bitcoin and Ether ETF for Nasda

Hashdex Proposes Combined Bitcoin and Ether ETF

Hashdex, a Brazil-based investment manager, submitted a proposal to the United States Securities and Exchange Commission (SEC) on June 18 to launch a combined spot Bitcoin and Ether exchange-traded fund (ETF) on the Nasdaq exchange. This innovative ETF aims to balance the crypto assets based on their market capitalizations, reflecting a composition of 70.54% Bitcoin and 29.46% Ether as of May 27.

Balancing crypto assets

The proposed ETF by Hashdex will adopt a passive investment strategy, tracking the daily market movements on the Nasdaq Crypto US Settlement Price Index without attempting to outperform it. Analyst James Seyffart commented that a combined-asset ETF “makes a lot of sense.” The ETF will solely focus on Bitcoin (BTC) and Ethereum (ETH), excluding other spot assets. However, the filing mentioned:

“In the event that any other crypto asset is included (other than bitcoin or ether) or is eligible for inclusion as an index constituent […], the sponsor will transition the trust’s investment strategy […] with only bitcoin and ether in the same proportions determined by the index.”

To qualify for inclusion, crypto assets must be listed on a U.S.-regulated digital asset trading platform or serve as the underlying asset for a derivative instrument listed on a U.S.-regulated derivatives platform. Coinbase and BitGo will act as custodians for the BTC and ETH assets, providing segregated accounts for individual shareholders.

Hashdex’s ETF Innovations

Hashdex previously filed with the SEC to create an Ether ETF but later withdrew the application. In Brazil, Hashdex’s indexed crypto ETF includes nine coins, with Bitcoin and Ether making up nearly 92% of the fund’s value. Its U.S.-traded spot Bitcoin ETF incorporates up to 5% Bitcoin futures contracts and acquires the spot asset on the CME. To proceed, Hashdex must file and receive approval for an S-1 application from the SEC. The agency has 90 days to respond to the 19-B4, during which it will accept public and institutional comments on the proposal. Seyffart anticipates a final SEC decision on the fund by March 2025.

Conclusion

Hashdex’s proposal for a combined Bitcoin and Ether ETF represents a significant step in the evolution of crypto investment products. By balancing BTC and ETH according to their market capitalizations, this ETF could offer investors diversified and regulated exposure to the two leading cryptocurrencies. As the SEC reviews the application, the financial community will closely watch for developments that could impact the broader acceptance and integration of cryptocurrency assets in traditional financial markets.

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Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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