Hashdex pulls out application for Ether ETF in spot market

Investment manager Hashdex has decided to withdraw its application for a spot Ether exchange-traded fund (ETF), as stated in documents filed with the United States Securities and Exchange Commission (SEC). The filing from May 28 reveals that Hashdex pulled its application for the proposed rule change that would have allowed the Hashdex Nasdaq Ethereum ETF to debut. The withdrawal occurred on May 24, just one day after the SEC approved eight similar financial products. The reasons for the withdrawal and whether Hashdex plans to resubmit its proposal are currently unknown. Hashdex has not responded to requests for comment.
A source familiar with the application informed Cointelegraph that Hashdex no longer plans to proceed with a single asset Ether ETF. On May 23, the SEC approved the 19b-4 filings from various companies, including VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise. This clearance paves the way for spot Ether (ETH) ETFs to be listed and traded on their respective exchanges. It is expected that these funds will launch in June.
Unlike other applicants, Hashdex’s application for a spot Ether ETF combined spot Ether holdings with Ether futures contracts in the same product, in an attempt to mitigate potential manipulation. Other applicants, such as Fidelity, ARK 21Shares, and Franklin Templeton, focused on purely spot-based Ether ETFs and made late amendments to their filings in response to SEC feedback, such as removing support for ETH staking.
Furthermore, Hashdex’s ETF aimed to mirror daily fluctuations in the Nasdaq Ether Reference Price to address regulatory concerns regarding market manipulation. Hashdex is one of the issuers of spot Bitcoin (BTC) ETFs approved in January. The company’s BTC fund utilized an alternative strategy compared to other asset managers. For example, Hashdex’s Bitcoin ETF did not rely on the Coinbase surveillance sharing agreement and instead sourced spot BTC from physical exchanges within the CME market.
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