The Nasdaq stock exchange has made a significant move by submitting an application to the Securities and Exchange Commission (SEC) in hopes of gaining approval to list an Ethereum Exchange-Traded Fund (ETF) offered by Hashdex, a reputable asset management company.
What sets this ETF apart is its innovative approach to cryptocurrency investment within the boundaries of regulatory compliance.
Dubbed the Hashdex Nasdaq Ethereum ETF, this investment vehicle marks a milestone as the first Ethereum futures filing under the ’33 Act.
It is administered and overseen by Toroso Investments, a registered commodity pool operator with the Commodity Futures Trading Commission (CFTC) and a member of the National Futures Association.
The recent influx of cryptocurrency ETF applications has put a spotlight on whether these proposed funds will include futures contracts or spot assets.
While the SEC has given the green light for the former, the latter remains unapproved.
Fund managers are now exploring a middle-ground strategy, testing the waters in this evolving regulatory landscape.
The primary objective of the Hashdex fund is to ensure that its shares closely reflect the daily fluctuations in the Nasdaq Ether Reference Price.
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To achieve this, the fund plans to diversify its assets by investing in ether, ether futures contracts traded on the CME, and maintaining cash and cash equivalents.
According to Nasdaq’s 19b-4 form, the fund’s approach is to reduce its dependence on the spot market, which could be susceptible to price manipulation, by incorporating a mix of Spot Ether, Ether Futures Contracts, and cash.
Hashdex’s strategy differs from recent filings in the cryptocurrency ETF space.
Notably, it will not rely on the Coinbase surveillance sharing agreement, opting instead to acquire spot Bitcoin from physical exchanges within the CME market.
In recent developments, both Ark Invest and 21Shares have also submitted applications to the SEC for spot ether ETFs, a type of ETF also sought after by VanEck.
The SEC has yet to make determinations on all the applications it has received for spot cryptocurrency funds, keeping investors and enthusiasts eagerly awaiting further developments in the evolving landscape of cryptocurrency investments.
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