Hashdex has put forward a proposal in a filing dated June 18 with the United States Securities and Exchange Commission (SEC) to establish a unique exchange-traded fund (ETF) on the Nasdaq exchange. This ETF would combine spot Bitcoin (BTC) and Ether (ETH) and balance them based on their market capitalizations, with BTC at 70.54% and ETH at 29.46% as of May 27. The investment strategy of this ETF would be passive, tracking the daily market movements on the Nasdaq Crypto US Settlement Price Index without attempting to outperform it.
An ETF that offers the best of both worlds, analyst James Seyffart expressed that a combined-asset ETF is a logical choice. The ETF would solely focus on investing in BTC and ETH, excluding other spot assets. However, it is important to note that crypto assets must meet specific criteria to be eligible for inclusion, such as being listed on a U.S.-regulated digital asset trading platform or being the underlying asset for a derivative instrument on a U.S.-regulated derivatives platform.
Coinbase and BitGo have been selected as custodians for the BTC and ETH assets, providing segregated accounts for individual shareholders. Hashdex, known for innovative ETF structures, had initially filed for an ETH ETF with the SEC but later retracted the application. Their indexed crypto ETF in Brazil consists of nine coins, with BTC and ETH making up nearly 92% of the total value. Additionally, their U.S.-traded spot BTC ETF includes up to 5% BTC futures contracts and acquires the spot asset on the CME.
Hashdex is now awaiting SEC approval on an S-1 application, with a 90-day period for the agency to respond to the 19-b4 filing. During this time, feedback from the public and other financial institutions on the proposal will be considered. According to Seyffart, a final decision from the SEC on the fund is expected by no later than March 2025.
In conclusion, while Ethereum’s recent pullback may be concerning to some, Dynamo DeFi and X Hall of Flame suggest that it could present an opportunity for investors.