Hashdex has submitted a second amended S-1 application to the SEC for its Nasdaq Crypto Index US ETF, aiming to offer investors exposure to Bitcoin and Ether.
Hashdex, an asset management firm, has made additional strides in its efforts to establish a cryptocurrency-focused exchange-traded fund (ETF) in the United States. The company has submitted its second amended S-1 application to the U.S. Securities and Exchange Commission (SEC), as stated in an announcement on Nov. 25.
Hashdex Second Amendment for the Nasdaq Crypto Index US ETF
Hashdex’s most recent filing is yet another development in its ongoing endeavors to obtain regulatory approval for the Nasdaq Crypto Index US ETF. The ETF’s objective is to offer investors exposure to a diverse portfolio of cryptocurrencies.
The Nasdaq Crypto US Index currently comprises only two assets: Bitcoin (BTC) and Ether (ETH). Consequently, the fund will initially comprise this pair. Nevertheless, the filing acknowledged that the portfolio could potentially be expanded to encompass additional digital currencies in the future.
Hashdex’s initial S-1 application was modified in October due to the SEC’s request for additional time to assess the proposal. Subsequently, the amended filing was submitted.
The SEC has historically been cautious in approving cryptocurrency-related products, and the amended filings serve as evidence of Hashdex’s ongoing compliance efforts to satisfy regulatory obligations. Despite the US SEC’s position, firms have continued to submit applications for Spot exchange-traded funds (ETFs), such as the most recent one filed by WisdomTree for an XRP ETF.
An Increase in the Demand for Crypto Index ETFs
As the demand for diversified investment products increases, asset managers have identified crypto index ETFs as a critical area of focus. These ETFs are compared to traditional index funds, such as those that track the S&P 500, by industry observers, which offer investors a comprehensive market exposure.
“Index ETFs are efficient for investors, similar to the way in which individuals purchase the S&P 500 in an ETF.” “This will be the same in crypto,” stated Katalin Tischhauser, the director of investment research at Sygnum, a financial institution that specializes in cryptocurrency.
Hashdex Is Not the Sole Entity that is Pursuing a Cryptocurrency Index ETF
Franklin Templeton and Grayscale are among the asset managers that are also pursuing approval for comparable products. The Franklin Crypto Index ETF would correspond to the CF Institutional Digital Asset Index, which, similar to the Nasdaq Crypto US Index, is presently concentrated on Bitcoin and Ethereum.
Grayscale’s Digital Large Cap Fund, which maintains a portfolio of cryptocurrencies, including Bitcoin, Ethereum, Solana (SOL), and XRP, has also submitted an application for conversion to an ETF.
Market Implications and Potential Regulatory Changes
The regulatory environment for cryptocurrency exchange-traded funds (ETFs) in the United States may undergo a substantial transformation in the months ahead. Gary Gensler, the current Chair of the Securities and Exchange Commission (SEC), has declared his intention to retire on January 20, 2025.
This timeline corresponds with the commencement of Donald Trump’s second presidential term. Trump, who has previously expressed a pro-crypto stance, has criticized Gensler’s strict approach to cryptocurrency regulation and promised reforms aimed at fostering growth in the sector.
The approval process for financial products related to cryptocurrency may be affected by the leadership transition at the SEC, according to regulatory analysts. According to James Seyffart, an analyst at Bloomberg ETFs, the SEC’s determination of whether or not index ETFs that hold altcoins such as XRP and Solana are compliant with current regulations may determine their approval.
“If the majority of the allocation remains in Bitcoin and Ethereum, regulatory concerns regarding altcoins in index ETFs could be mitigated,” Seyffart explained. He also stated that although there is optimism regarding these products, the final decisions will likely be contingent upon the priorities and approach of the incoming SEC administration.