Hashdex Proposes First-Ever Combined Bitcoin and Ether ETF in the US
In a groundbreaking move, Hashdex, a Brazilian investment manager, has filed a proposal with the US Securities and Exchange Commission (SEC) on June 18th. The filing seeks approval for a unique exchange-traded fund (ETF) on the Nasdaq exchange, offering exposure to both Bitcoin (BTC) and Ether (ETH).
This proposed ETF would hold a basket of Bitcoin and Ether, with the allocation mirroring their respective market capitalizations. As of May 27th, this translates to roughly 70.54% Bitcoin and 29.46% Ether. The ETF would operate passively, tracking the daily price movements of the Nasdaq Crypto US Settlement Price Index, aiming to deliver similar returns without actively attempting to outperform the index.
Financial analyst James Seyffart expressed his approval, stating that a combined-asset ETF like this “makes a lot of sense.” The filing clarifies that the ETF would solely focus on Bitcoin and Ether, excluding other crypto assets. However, it outlines a contingency plan for future inclusions: “Should any additional crypto asset become eligible for inclusion within the Index, the investment strategy will transition to maintain only Bitcoin and Ether in the same proportions dictated by the Index.”
Eligibility and Safekeeping
The filing details the criteria for a crypto asset to be included in the ETF. Assets must be actively traded on a US-regulated digital asset trading platform or serve as the underlying asset for a derivative instrument listed on a US-regulated derivatives platform. To ensure secure storage, both Coinbase and BitGo will act as custodians for the Bitcoin and Ether holdings, providing segregated accounts for individual investors.
Hashdex’s Track Record in Crypto ETFs
This isn’t Hashdex’s first foray into the crypto ETF landscape. Previously, they filed an application with the SEC for a standalone Ether ETF, though it was later withdrawn. In Brazil, Hashdex already offers an indexed crypto ETF encompassing nine different coins, with Bitcoin and Ether constituting nearly 92% of its value. Interestingly, their US-traded spot Bitcoin ETF incorporates up to 5% Bitcoin futures contracts while acquiring the underlying asset on the CME (Chicago Mercantile Exchange).
The Approval Process and Timeline
While the SEC filing marks a significant step forward, Hashdex still needs to submit and receive approval for a formal S-1 application. The SEC has 90 days to respond to the initial 19-b4 filing, during which time they will consider public comments and feedback from financial institutions. Analyst Seyffart predicts a final decision from the SEC regarding the fund by March 2025.
