Hashdex Files Second Amendment for Nasdaq Crypto Index US ETF Approval

by

As an analyst with over two decades of experience in the financial industry, I’ve witnessed the evolution of asset management from traditional stocks and bonds to the dynamic world of cryptocurrencies. The recent amendment by Hashdex for their Nasdaq Crypto Index US ETF is a significant step forward in this space, reflecting the growing interest in crypto index ETFs as a means to provide diversified investment products.

Hashdex, a firm specializing in asset management, is moving forward with plans to introduce a cryptocurrency-oriented exchange-traded fund (ETF) in the U.S. market. On November 25th, they announced that they have filed their second revised application with the U.S. Securities and Exchange Commission (SEC).

Hashdex Second Amendment for Nasdaq Crypto Index US ETF

Hashdex’s recent submission signifies another progression in their continuous pursuit of obtaining regulatory clearance for the Nasdaq Crypto Index US ETF. This ETF is designed to offer investors a broad investment opportunity in various digital currencies.

To start with, our investment pool initially consists of Bitcoin (BTC) and Ether (ETH), which are the only cryptocurrencies presently featured in the Nasdaq Crypto US Index. The prospectus suggests, though, that in the future, we may broaden our portfolio to incorporate other digital currencies.

The revised submission was made following modifications in October to Hashdex’s initial S-1 application, due to the SEC requiring more time to examine the proposal. Historically, the SEC has been cautious when it comes to approving cryptocurrency-related products, and these revisions underscore Hashdex’s persistent efforts to adhere to regulatory guidelines. Nevertheless, businesses persist in submitting applications for Spot exchange-traded funds (ETFs) like the recent one by WisdomTree, aiming at an XRP ETF, despite the US SEC’s conservative approach.

Growing Interest in Crypto Index ETFs

The interest in Cryptocurrency index Exchange-Traded Funds (ETFs) has become a significant point of attention for asset managers, given the expanding demand for varied investment options. These ETFs are often likened to conventional index funds, like those based on the S&P 500, which offer investors a wide market exposure.

Katalin Tischhauser, head of investment research at Sygnum, stated that Investing in Index ETFs is beneficial for individuals, similar to purchasing the S&P 500 through an ETF. She believes this concept will also apply to cryptocurrencies.

Hashdex isn’t the only entity eyeing the creation of a cryptocurrency index ETF. Companies like Franklin Templeton and Grayscale are also vying for similar approvals. The proposed Franklin Crypto Index ETF would mirror the CF Institutional Digital Asset Index, a benchmark that primarily focuses on Bitcoin and Ethereum, much like the Nasdaq Crypto US Index. Similarly, Grayscale’s Digital Large Cap Fund, which currently contains a variety of cryptocurrencies including Bitcoin, Ethereum, Solana (SOL), and XRP, has applied to transform into an ETF as well.

Potential Regulatory Changes and Market Implications

In the next few months, the rules governing crypto ETFs in the U.S. might undergo substantial changes. The current head of the Securities and Exchange Commission (SEC), Gary Gensler, has announced his resignation effective January 20, 2025. This date marks the start of a second term for former President Donald Trump. Known to be favorable towards cryptocurrencies, Trump has previously criticized Gensler’s tough stance on crypto regulations and pledged reforms intended to boost development in this sector if he were to return to office.

Regulatory experts predict that a change in leadership at the SEC could influence the way cryptocurrency-linked financial products are approved. As per Bloomberg’s ETF analyst, James Seyffart, the approval of index ETFs containing altcoins such as XRP and Solana might hinge on whether the SEC deems these lesser-known assets compatible with their current regulations.

“Regulatory concerns about altcoins in index ETFs could be reduced if most of the allocation remains in Bitcoin and Ethereum,” Seyffart explained. He added that while there is optimism about these products, the ultimate decisions will likely hinge on the incoming SEC administration’s priorities and approach.

Read More

2024-11-26 05:38