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Hashdex’s rivals, such as Ark Invest and 21Shares, have also approached the SEC with their separate applications for spot Ether ETFs.
Popular US-based stock exchange Nasdaq has formally filed an application with the Securities and Exchange Commission (SEC) seeking approval to list an Ethereum (Ether) Exchange-Traded Fund (ETF). This innovative investment vehicle is crafted to combine spot ether holdings and futures contracts within its portfolio, paving the way for a novel approach to crypto investment that conforms to regulatory guidelines. According to the filing submitted on September 11, the investment vehicle, known as the Hashdex Nasdaq Ethereum ETF, will be offered by Hashdex, a leading Brazilian asset management firm.
Additionally, the Fund will be entrusted to Toroso Investments, a commodity pool operator registered with the US Commodity Futures Trading Commission (CFTC) and a member of the National Futures Association if approved.
Nasdaq’s Investment Strategy For the New Fund
As the first ’33 Act Ethereum futures filed under the ’33 Act, the primary goal of the Hashdex fund is to mirror the daily fluctuations in the Nasdaq Ether Reference Price.
According to the filing, the Fund will adopt a diversified approach to achieve this goal, allocating its assets to investments in Ether, ether futures contracts traded on the CME, and cash equivalents.
Nasdaq’s approach, as described in the 19b-4 form, emphasized the need for balance, noting that instead of holding 100% spot Ether, which could make it more susceptible to price manipulation in the spot market, the Fund will contain a mix of Spot Ether, Ether Futures Contracts, and cash.
“By holding Ether Futures Contracts and cash in addition to Spot Ether, the Fund reduces its dependence on the spot market, thereby mitigating concerns about potential manipulation in unregulated Ether spot exchanges,” the company said in the filing.
The company also explained in the filing that due to the nature of the Fund, the price of the shares may vary from changes in the spot price of Ether.
A Departure from the Norm
Hashdex’s approach sets it apart from recent filings of Ethereum ETFs in the United States. Unlike others that depend on the Coinbase surveillance sharing agreement, Hashdex has chosen to source spot ether from physical exchanges within the CME market.
The company’s ETF application joins a wave of recent submissions. Hashdex’s rivals, such as Ark Invest and 21Shares, have also approached the SEC with their separate applications for spot ether ETFs, a sought-after asset class that VanEck is also pursuing.
SEC Delays Decision on Bitcoin ETF Applications
In June, a wave of crypto ETFs hit the SEC with over 15 companies, including WisdomTree, BlackRock, and Fidelity, seeking approval to offer their customers the opportunity to interact with the industry without directly investing in the asset class.
A month after the submissions, the Commission agreed to review some of the applications, including the one filed by the asset manager BlackRock. That same month, the SEC announced that it had approved the first leveraged Bitcoin (BTC) futures ETF named Volatility Shares 2x Bitcoin Strategy ETF (BITX), which started trading on Chicago Board Options (CBOE) BZX Exchange on June 27.
The SEC, however, has deferred decisions on all other applications, keeping the industry on edge as it eagerly awaits their determination.