Nasdaq Seeks SEC Approval for Innovative Ethereum ETF with Mixed Investment Approach


Nasdaq has submitted a request to the Securities and Exchange Commission (SEC) to list a new Ethereum Exchange-Traded Fund (ETF) from Brazilian asset manager Hashdex. This ETF, known as the Hashdex Nasdaq Ethereum ETF, aims to hold both spot ether and futures contracts.

Key details about the ETF and its filing with the SEC:

Mixed Investment Approach: The Hashdex Nasdaq Ethereum ETF takes a unique approach by combining both spot ether and ether futures contracts in its portfolio. This strategy is intended to provide diversification and reduce vulnerability to potential price manipulation in the spot market.

Investment Objective: The fund's primary goal is to track the daily price changes of the Nasdaq Ether Reference Price. To achieve this, it will invest in a mix of assets, including ether, ether futures contracts listed on the CME (Chicago Mercantile Exchange), cash, and cash equivalents.

Mitigating Market Manipulation: By incorporating ether futures contracts and cash alongside spot ether, the ETF aims to minimize its reliance on the spot market. This approach is designed to address concerns related to potential manipulation in unregulated ether spot exchanges. Instead, the fund will leverage the transparency and oversight provided by regulated exchanges, such as the CME.

Hashdex's CEO, Marcelo Sampaio, has emphasized the company's collaborative approach with regulators. He mentioned that they work with regulators rather than engage in legal battles. This stance reflects the broader efforts within the cryptocurrency industry to establish regulatory-compliant investment products.

The SEC has been receiving a growing number of ETF applications for cryptocurrencies, with a particular focus on whether the funds intend to hold spot assets or futures contracts. While the SEC has approved some ETFs based on futures contracts, it has not yet approved any that hold spot assets. Various asset managers, including Ark Invest, 21Shares, and VanEck, have applied for spot ether ETFs, although the SEC has delayed decisions on these filings.

The Hashdex Nasdaq Ethereum ETF represents another attempt to offer investors exposure to Ethereum through an ETF structure, and its unique approach could provide a middle ground between spot and futures-based offerings. However, the SEC's decision on this filing will ultimately determine its fate.

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