Hashdex has proposed in a June 18 filing with the United States Securities and Exchange Commission (SEC) to create a combined spot Bitcoin (BTC) and Ether (ETH) exchange-traded fund (ETF) on the Nasdaq exchange.
The proposed ETF would balance the crypto assets according to their market capitalizations, cited as 70.54% Bitcoin (BTC) and 29.46% Ether (ETH) on May 27. Its passive investment strategy would track the daily market movement on the Nasdaq Crypto US Settlement Price Index without trying to “beat” it.
An ETF with the best of all worlds
A combined-asset ETF “makes a lot of sense,” analyst James Seyffart said. The ETF would not invest in other spot assets besides BTC and ETH. However, it added:
“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.”
Crypto assets are eligible for inclusion under a set of rules that “includes being currently listed on a U.S.-regulated digital asset trading platform or serving as the underlying asset for a derivative instrument listed on a U.S.-regulated derivatives platform,” the filing said.
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Both Coinbase and BitGo will serve as custodians for the BTC and ETH assets. They will offer segregated accounts for individual shareholders.
Hashdex innovates ETF structures
Brazil-based investment manager Hashdex filed with the SEC to create an ETH ETF but later withdrew its application. Its indexed crypto ETF traded in Brazil contains nine coins, with BTC and ETH accounting for nearly 92% of the value. Its U.S.-traded spot BTC ETF contains up to 5% BTC futures contracts and acquires the spot asset on the CME.
Hashdex is still required to file and receive SEC approval on an S-1 application. The agency has 90 days to respond to the 19-b4, during which time it will accept comments from the public and other financial institutions on the proposal. According to Seyffart, a final SEC decision on the fund should be seen no later than March 2025.
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