Hashdex, a Brazilian investment manager, has made waves in the crypto ETF space by proposing a first-of-its-s-kind offering in the United States. Their SEC filing, submitted on June 18th, outlines a novel exchange-traded fund (ETF) that would hold both Bitcoin (BTC) and Ether (ETH) in a single product.
A Marriage of Market Leaders: Balancing Bitcoin and Ether
This innovative ETF proposes to dynamically balance its holdings based on the market capitalizations of Bitcoin and Ether. As of May 27th, the proposed allocation would be 70.54% Bitcoin and 29.46% Ether, reflecting their respective market dominance.
Hashdex emphasizes a passive investment strategy. The ETF wouldn’t attempt to outperform the market but rather track the daily movements of the Nasdaq Crypto US Settlement Price Index. This index serves as a benchmark for the combined value of Bitcoin and Ether.
Analyst View: Combining the Best of Both Worlds
Financial analyst James Seyffart sees merit in this combined-asset ETF. It offers investors exposure to the two leading cryptocurrencies in a single, convenient package. Notably, the ETF will strictly focus on Bitcoin and Ether, excluding other digital assets from its holdings.
Hashdex has enlisted Coinbase and BitGo as custodians for the Bitcoin and Ether held by the ETF. These reputable institutions will provide segregated accounts for individual shareholders, ensuring the security of investors’ assets.
Hashdex’s Track Record in Crypto ETFs
This isn’t Hashdex’s first foray into crypto ETFs. They previously filed with the SEC for an Ether-only ETF, which was later withdrawn. In Brazil, their indexed crypto ETF holds a mix of nine coins, with Bitcoin and Ether comprising nearly 92% of its value. Additionally, their US-listed Bitcoin ETF utilizes a unique strategy, incorporating up to 5% Bitcoin futures contracts alongside spot holdings acquired on the CME exchange.
Navigating the Approval Process
The proposed ETF still requires SEC approval. The agency has 90 days to respond to the filing, during which time public and financial institution feedback will be considered. Analyst Seyffart predicts a final decision from the SEC by no later than March 2025.
Hashdex’s proposal marks a significant step towards broader crypto investment options in the US. The combined Bitcoin-Ether ETF holds the potential to simplify cryptocurrency exposure for investors, potentially ushering in a new era of crypto investing in the US market.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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