After the recent filing of a Spot Bitcoin ETF by Franklin Templeton, a renowned asset manager, the Nasdaq stock exchange has taken a significant step in the realm of cryptocurrency investments. They have submitted an application to the Securities and Exchange Commission (SEC) for the approval of an Ethereum Exchange-Traded Fund (ETF) known as the Hashdex Nasdaq Ethereum ETF.
This innovative ETF, offered by Hashdex, an asset management company, represents a pioneering approach to cryptocurrency investment within the regulatory framework. The Hashdex ETF, supervised by Toroso Investments (a registered commodity pool operator with the CFTC and a member of the National Futures Association), marks the first ’33 Act Ethereum futures filing.
While the cryptocurrency space has witnessed multiple ETF applications, the SEC has primarily approved those involving futures contracts, leaving spot asset ETFs unapproved. The surge in cryptocurrency ETF applications has also raised questions about whether these proposed funds will include futures contracts or spot assets.
The Hashdex fund’s primary objective is to closely mirror the daily fluctuations in the Nasdaq Ether Reference Price. To achieve this objective, the fund intends to diversify its asset allocation across several investment categories, including ether, ether futures contracts traded on the CME, and cash along with cash equivalents.
“Instead of holding 100% spot Ether, which could make it more susceptible to price manipulation in the spot market, the Fund will hold a mix of Spot Ether, Ether Futures Contracts, and cash.”
By incorporating Ether Futures Contracts and cash into its holdings, the fund aims to reduce its dependence on the spot market, addressing concerns regarding potential manipulation in unregulated Ether spot exchanges.
In a recent report by Todayq News, both Ark Invest and 21Shares submitted applications to the SEC for a spot Ethereum ETF, followed by VanEck. There are some other entities that filed for both Bitcoin and Ethereum ETFs, including VanEck Ethereum Strategy ETF and Grayscale Ethereum Futures ETF. The SEC, as of today, has postponed its determinations on all applications received for spot cryptocurrency funds.