On June 18, 2024, Hashdex, a prominent crypto-focused asset management company, submitted an application to the United States Securities and Exchange Commission (SEC) for an innovative exchange-traded fund (ETF) that seeks to be the first to offer a combined spot Bitcoin and Ether ETF in the United States. This groundbreaking proposal aims to track the prices of both Bitcoin (BTC) and Ethereum (ETH), and if approved, it would set a new benchmark in the rapidly evolving digital economy.
Details of Hashdex’s ETF Application
Hashdex’s application outlines plans to list the ETF on the Nasdaq stock exchange, providing investors with seamless access to the fund upon receiving authorization from the SEC. The proposed ETF would allocate its investments based on the market capitalizations of Bitcoin and Ether, with a composition of 70.54% in Bitcoin and 29.46% in Ether as of May 27, 2024. This proportional allocation ensures that the ETF holdings accurately reflect the market prominence of these leading cryptocurrencies.
The investment strategy for the crypto ETF would be passive, tracking the Nasdaq Crypto US Settlement Price Index to mirror the daily market movements without attempting to outperform it. This approach offers a straightforward investment vehicle for investors looking to gain exposure to Bitcoin and Ethereum without directly owning the underlying assets.
As of June 1, 2024, the dual crypto ETF has entered the SEC’s review phase. The acknowledgment of Hashdex’s filing by the SEC marks a significant step towards introducing more diversified and innovative investment options into the crypto market. Should the SEC approve this dual crypto fund, it would pave the way for investors from various backgrounds to participate in crypto investing through a regulated and accessible platform.
Current Landscape of Crypto ETFs
In the current U.S. market, both institutional and retail investors have access to 11 spot Bitcoin ETFs offered by financial companies such as BlackRock, Bitwise, Grayscale Investments, and Fidelity. Approved by the SEC in January, these Bitcoin ETFs have demonstrated considerable success, attracting millions of dollars in daily investments and highlighting their popularity among investors.
Building on this success, U.S.-based asset managers have also submitted applications for Ethereum spot ETFs earlier this year. The SEC has approved the initial round of these applications, with the industry anticipating final approval later this year, potentially starting as early as July 4.
Additionally, the crypto market is witnessing further diversification with new filings. Recently, two major asset managers, VanEck and 21Shares, submitted applications for a crypto ETF that would directly track the price of Solana (SOL). This marks the first time Solana has been considered for an ETF, highlighting its growing recognition in the crypto investment space.
The SEC’s review of Hashdex’s dual Bitcoin and Ethereum ETF proposal signifies a crucial development in the crypto investment landscape. If approved, this ETF would offer a new, regulated investment avenue for crypto enthusiasts, potentially setting a precedent for future crypto-related financial products. As the market eagerly awaits the SEC’s decision, the approval of such innovative ETFs could further solidify the integration of cryptocurrencies into mainstream investment portfolios.
