June 21, 2024
By Sharan Kaur Phillora
Hashdex, a leading digital asset investment firm, has presented a proposal to the Securities and Exchange Commission (SEC) for the establishment of a novel exchange-traded fund (ETF). The proposed Hashdex Nasdaq Crypto Index US ETF aims to provide investors with exposure to Bitcoin and Ethereum, the two most prominent cryptocurrencies, as per their representation in the Nasdaq Crypto Index.
Here’s what we know:
This initiative highlights a substantial stride towards the incorporation of digital assets into traditional financial instruments, broadening the reach of cryptocurrencies to a more extensive investor base.
The ETF’s construction aligns with the Nasdaq Crypto Index, with Bitcoin and Ethereum occupying approximately 70.54% and 29.46% of the fund, respectively. This arrangement adheres to a market-cap-weighted strategy, reflecting the index’s broader cryptocurrency market representation.
The fund’s backing will be entrusted to reputable custodians, Coinbase Custody Trust Company and BitGo Trust Company, ensuring robust security measures. Additionally, the ETF will maintain cash reserves.
Initially, the focus is on Bitcoin and Ethereum; however, the ETF may consider incorporating further digital assets, subject to SEC approval.
The filing comes at an opportune time, amidst a supportive regulatory environment. Following the SEC’s approval of Bitcoin spot ETFs and the anticipated introduction of Ethereum ETFs in the U.S. market, SEC Chair Gary Gensler’s recent statements to a Senate committee hint at the potential availability of Ethereum ETFs as early as this summer.
Hashdex’s proposal represents a pioneering effort to bridge the gap between traditional finance and the burgeoning cryptocurrency realm, potentially catalyzing broader adoption and fostering innovation within the digital asset industry.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
