In the fast-evolving world of crypto, Hashdex, a crypto asset management firm, has entered the race for the first US spot Bitcoin exchange-traded fund (ETF). The company has formally submitted an application to the US Securities and Exchange Commission (SEC), with a unique approach: they are seeking approval for a Bitcoin futures ETF incorporating direct investments in spot Bitcoin.
Exchange-traded funds (ETFs) function as investment vehicles traded on stock markets, with their value tied to an underlying mix of assets like stocks, bonds, and commodities. Similarly, Bitcoin ETFs track the value of Bitcoin and trade on traditional stock exchanges, setting them apart from crypto exchanges.
Unlike recent endeavours from giants like BlackRock that relied on a surveillance-sharing agreement with the crypto exchange Coinbase, Hashdex has chosen a different path. The company plans to acquire spot Bitcoin through reputable physical exchanges operating within the CME market. This approach sets Hashdex apart and reflects a unique strategy. A 19b-4 filing with the SEC indicates that Hashdex aims to rename its ETF and modify its ticker to Hashdex Bitcoin ETF.
Financial analysts have had varying opinions of Hashdex's distinctive Bitcoin ETF filing. For instance, James Seyffart, a Bloomberg analyst, highlighted the strategy's focus on exchange for related positions transactions. This involves exchanging futures contracts for an equivalent exposure to spot Bitcoin, diverging from direct cash purchases on exchanges.
Seyffart predicts a higher likelihood of SEC approval on this proposal due to external pressures on Gary Gensler, chairman of the US Securities and Exchange Commission, driven by factors such as the increasing Ethereum futures ETF proposals and BlackRock's adoption of the Coinbase surveillance sharing agreement.
Noteworthy figures in the financial sector, including Nate Geraci, President of The ETF Store, investor Alistair Milne, and finance attorney Scott Johnsson, have also commented on Hashdex's distinct Bitcoin ETF submission. They believe it could address specific SEC concerns related to Bitcoin market manipulation and liquidity.
While the approval of a spot Bitcoin ETF seems close, the latest unfolding scenarios in the US crypto space emphasise the ever-evolving dynamics of the crypto realm. While the industry wrestles with complex regulatory challenges and security deliberations, the results of these occurrences continue to captivate keen attention.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash