Hashdex Enters Competition for Bitcoin ETF Approval with Distinctive Approach
Mitchell Nixon
Hashdex’s strategy sets it apart from recent submissions, as it will not rely on the Coinbase surveillance sharing arrangement. Instead, the company chooses to obtain spot Bitcoin from physical exchanges operating within the CME market.
Hashdex, a company specialising in crypto asset management, has entered the competitive arena vying for approval of a spot Bitcoin exchange-traded fund (ETF) in the United States.
The firm has formally lodged an application with the U.S. Securities and Exchange Commission (SEC) for an ETF centred around Bitcoin futures, with a unique feature of holding spot Bitcoin.
Diverging from recent submissions, Hashdex’s approach sets it apart. The company has chosen not to rely on the Coinbase surveillance sharing agreement, instead favouring the acquisition of spot Bitcoin from physical exchanges operating within the CME market. A 19b-4 filing by NYSE Arca to the U.S. SEC indicates that Hashdex intends to integrate spot Bitcoin into its Bitcoin futures ETF and rebrand it with the new name “Hashdex Bitcoin ETF.”
Breaking: NYSE files a modification to another ETF, to be now called the Hashdex Bitcoin ETF
Their application is unique in that it will not use Coinbase, they will use prices and acquire spot BTC via CME.
It will hold a mixture of spot & futures positions
Hard to reject imo pic.twitter.com/K1ABKKZX5o— Alistair Milne (@alistairmilne) August 25, 2023
Market analysts have reacted to Hashdex’s novel Bitcoin ETF proposal. James Seyffart, an analyst at Bloomberg, noted that the strategy primarily involves executing transactions involving exchange for related positions. This approach involves exchanging futures contracts for an equivalent spot exposure, as opposed to direct cash purchases from exchanges.
Seyffart believes that there is a higher probability of SEC approval, citing the pressure on Gary Gensler, the head of the SEC, due to factors such as the Grayscale lawsuit, the submission of Ethereum futures, and BlackRock’s integration of the Coinbase surveillance sharing agreement.
Other experts, including Nate Geraci, the president of The ETF Store, investor Alistair Milne, and finance attorney Scott Johnsson, have also weighed in on Hashdex’s unconventional Bitcoin ETF proposal. They posit that it could address certain concerns of the SEC regarding market manipulation and liquidity issues related to Bitcoin.
As of now, the SEC and its Chair, Gary Gensler, have refrained from commenting on the applications for spot Bitcoin ETFs, the increasing influx of Ethereum ETFs, and the potential approval of a spot Bitcoin ETF within the current year.