Brazilian Crypto Firm Files for Combined Spot, Futures Ether ETF
Brazilian investment firm Hashdex is seeking to launch an ether ETF with the Nasdaq exchange that holds both futures contracts and spot ether.
Nasdaq filed an application with the Securities and Exchange Commission to list the exchange-traded fund, which is called the Hashdex Nasdaq Ethereum ETF. The ETF will aim to invest in futures contracts listed on the Chicago Mercantile Exchange.
By holding ether futures contracts and spot ether, the ETF “reduces its dependence on the spot market, thereby mitigating concern about potential manipulation in unregulated ether spot exchanges,” according to the filing.
“As its investment thesis has evolved and improved, there has been more demand to access ETH in familiar, regulated investment products like ETFs,” Samir Kerbage, Hashdex’s chief investment officer, wrote in a recent blog post.
Unique Structure for Spot Bitcoin, Futures Ether ETF
The proposed ETF is also novel because it is the first fund to include ether futures structured under the 1933 Securities Act, as opposed to the 1940 Investment Act, which is what competing funds have filed under. While the 1940 Investment Act allows ETF to invest in securities, ETFs under the 1933 act can invest in commodities.
The fund would be managed by Toroso Investments.
The filing comes as a slew of firms jockey to gain first-mover advantage among cryptocurrency investors and convince the SEC that such funds are safe investment vehicles.
Hashdex filed to convert its bitcoin futures ETF into a spot bitcoin fund in August. While the SEC allows ETFs that track bitcoin futures contracts, such as the ProShares Bitcoin Strategy ETF (BITO), the agency has thus far blocked over 30 applications for an ETF that tracks spot bitcoin.
Asset managers including Bitwise Asset Management and Valkyrie Investments have also applied for ether futures ETFs amid reports that the SEC has warmed up the idea of considering an ether futures fund. For the funds to be approved, the agency would have to explicitly designate whether they consider ether a security or a commodity, according to etf.com analyst Sumit Roy.
On Sept. 6, Ark Investment Management LLC, along with crypto exchange traded product firm 21Shares, filed for the first spot ether fund.
