Hashdex is pursuing approval to present a hybrid blend of spot and future contracts Ethereum ETF, with an application submitted by the Nasdaq stock exchange to the United States Securities and Exchange Commission (SEC).
The filing clarifies that, owing to the application’s nature, the share price may deviate from Ether’s spot price.
Hashdex Ethereum ETF Aims To Reduce Risks
According to a September 11 filing, the Hashdex Nasdaq Ethereum ETF has been put forth to the SEC for approval. This will offer investors exposure to both Ethereum spot and futures contracts. However, it notes that this endeavor could encounter price fluctuations:
“Because the Fund’s investment objective is to track the price of the Benchmark by investing in Ether and Ether Futures Contracts, changes in the price of the Shares may vary from changes in the spot price of Ether.”
The fund will be managed by Toroso Investments. Toroso believes that the investment strategy aims to reduce manipulation risk by diversifying holdings. It also declares that it addresses the SEC’s ongoing concerns about a spot Ethereum ETF.
“Instead of holding 100% spot Ether, which could make it more susceptible to price manipulation in the spot market, the Fund will hold a mix of Spot Ether, Ether Futures Contracts, and cash,” the filing states.
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The filing adds that this diverse portfolio structure has certain investment limits. These rules include capping the amount of spot Ether the fund can hold to reduce the risk of manipulation.
In an interview with BeInCrypto, Samir Kerbage, Chief Investment Officer at Hashdex, expressed his belief that Brazil is leading the way in the realm of crypto ETFs.
In 2021, the The Brazilian Securities Exchange Commission (CVM) granted approval for both a Bitcoin ETF and an Ethereum ETF. Both of them are currently listed on B3, which is Brazil’s second-oldest stock exchange.
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Kerbage believes the Brazilian government recognized crypto’s early interest and prioritized regulatory framework for investor protection.
“Brazil has the most advanced crypto ETF market in the world, including several index strategies,” Kerbage states, noting that other nations should consider reviewing their approach to ETFs based on Brazil’s example:
“We believe Brazil’s model can help inform the US and other countries as they create their own regulatory frameworks.”
This follows a recent report suggesting that the SEC is nearing approval for the first Ethereum Futures ETF. It indicates potential authorization in just a few weeks.
On August 18, a report citing familiar sources discloses that several firms could get approval to launch an Ether-Futures ETF by October. “The regulator isn’t likely to block the products, which would be based on the second-largest cryptocurrency, according to people familiar with the matter,” the report states.
Although numerous firms have submitted applications, it remains uncertain which firms will receive approval, if any, and in what order.
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