The Hashdex Nasdaq Ethereum ETF is a novel approach to address the logjam on the SEC approval to a spot bitcoin ETF.

Nasdaq has submitted a filing with the Securities and Exchange Commission (SEC) to list an Ethereum Exchange-Traded Fund (ETF) offered by the Brazilian asset manager Hashdex. This ETF, named the Hashdex Nasdaq Ethereum ETF, aims to diversify its holdings by including both spot ether and futures contracts in its portfolio. Toroso Investments, which manages and oversees the fund, is registered as a commodity pool operator with the Commodity Futures Trading Commission and is a member of the National Futures Association.

In the world of crypto ETFs, a key consideration is whether the fund intends to hold futures contracts or spot assets. While the SEC has approved ETFs involving futures contracts, the approval for pure spot funds has been elusive. Consequently, fund managers like Hashdex are exploring a middle-ground approach. (The Block)

The Hashdex fund’s primary investment objective is to mirror the daily fluctuations in the Nasdaq Ether Reference Price. To achieve this, it plans to invest in ether, ether futures contracts listed on the CME, cash, and cash equivalents. Rather than exclusively holding spot ether, which could be vulnerable to price manipulation in the unregulated spot market, the fund will maintain a blend of Spot Ether, Ether Futures Contracts, and cash. This diversification strategy is designed to mitigate concerns about potential manipulation, as it relies on the regulated CME Market for Ether Futures Contracts, which offers enhanced transparency and oversight compared to unregulated spot exchanges.

Hashdex’s CEO, Marcelo Sampaio, has emphasized the company’s cooperative approach with regulators, in contrast to legal battles. He pointed out the inevitability of a spot Bitcoin ETF, though the timeline and context remain uncertain.

Notably, other entities like Ark Invest and 21Shares, along with VanEck, have also submitted applications for spot ether ETFs to the SEC.

However, the SEC has postponed decisions on all filings related to spot crypto funds, adding a layer of uncertainty to the crypto ETF landscape.

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