NASDAQ, the world-renowned stock exchange, has officially submitted a filing to the Securities and Exchange Commission (SEC) for the listing of an Ethereum Exchange-Traded Fund (ETF). This strategic initiative is in collaboration with the Brazilian asset management giant, Hashdex, which has demonstrated a keen interest in holding both spot ether and futures contracts.
The result of this partnership will be the birth of the Hashdex Nasdaq Ethereum ETF, a fund that will be expertly managed and controlled by Toroso Investments. Toroso Investments, with its status as a registered commodity pool operator under the Commodity Futures Trading Commission (CFTC) and its affiliation with the National Futures Association (NFA), plays a pivotal role in this ambitious venture.
Innovative Investment Approach of the Hashdex Nasdaq Ethereum ETF
What sets the proposed Hashdex Nasdaq Ethereum ETF apart is its unique approach of combining futures contracts and spot funds. This strategic choice is a direct response to the SEC’s recent approval of futures contracts while declining spot products in the cryptocurrency realm.
According to the submitted 19b-4 form, the Hashdex fund aims to closely track daily fluctuations in the Nasdaq Ether Reference Price. To achieve this, it will invest in a diversified portfolio that includes ETH, Ether futures contracts listed on the Chicago Mercantile Exchange (CME), as well as cash and cash equivalents.
This multifaceted investment strategy will see the fund diversify its holdings across Spot Ether, Ether Futures Contracts, and cash reserves. The primary objective of this diversification is to reduce the fund’s reliance on the often volatile and unregulated Ether spot markets, thus addressing concerns of potential market manipulation. Instead, the Hashdex Nasdaq Ethereum ETF will place its trust in Ether Futures Contracts and Ether futures Exchange for Physicals (EFPs) traded on the highly regulated CME Market, ensuring a high degree of transparency and oversight.
Hashdex CEO’s Stance on Regulation and the Future of Bitcoin ETFs
In a nod to the evolving regulatory landscape, earlier this year, Marcelo Sampaio, the CEO and co-founder of Hashdex, publicly expressed his firm’s preference for collaboration with regulators over legal confrontations. This reference is, in part, to the notable case of Grayscale Investments, which secured a legal victory against the SEC after the rejection of its proposed spot Bitcoin ETF. Sampaio further conveyed his optimism regarding the eventual approval of a spot Bitcoin ETF, although the timeline and specific circumstances surrounding such an approval remain uncertain.
