Investment manager Hashdex has withdrawn its application for a spot Ether exchange-traded fund (ETF), according to documents filed with the United States Securities and Exchange Commission (SEC).
A filing dated May 28 reveals that Hashdex retracted its proposal for a rule change to introduce the Hashdex Nasdaq Ethereum ETF. This withdrawal occurred on May 24, just one day after the SEC approved eight similar financial products.
Hashdex’s Reasons for Withdrawal Unclear
Hashdex has not provided reasons for this decision, and it remains uncertain whether the company will resubmit the proposal. Cointelegraph attempted to contact Hashdex for comment but did not receive an immediate response. A source familiar with the situation informed Cointelegraph that Hashdex “no longer intends to move forward with a single asset Ether ETF.”
SEC Approves Other Ether ETFs
On May 23, the SEC approved 19b-4 filings from companies including VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise. These approvals pave the way for spot Ether ETFs to be listed and traded, with launches expected in June.
Hashdex’s Unique Approach
Unlike other applicants, Hashdex’s proposed spot Ether ETF aimed to combine spot Ether holdings with Ether futures contracts. This strategy was designed to mitigate potential manipulation. Other applicants, like Fidelity and ARK 21Shares, focused solely on spot-based Ether ETFs, making adjustments such as removing support for ETH staking based on SEC feedback.
Hashdex’s ETF proposal sought to track daily changes in the Nasdaq Ether Reference Price to address regulatory concerns about market manipulation. The initial filing from September 2023 stated:
“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.”
Previous Success with Bitcoin ETF
Hashdex is among the issuers of spot Bitcoin ETFs approved in January. The company’s Bitcoin ETF utilized a different strategy, sourcing spot BTC from physical exchanges within the CME market instead of relying on the Coinbase surveillance sharing agreement.
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For further updates on cryptocurrency news and ETF developments, stay tuned.
