Hashdex an Brazilian Crypto Asset Manager has filed with the U.S. Securities and Exchange Commission (SEC) for approval of a hybrid Ethereum ETF. ETF, which will be called as Nasdaq Crypto Index ETF, will track the performance of Nasdaq Crypto Index, which is composed of Ethereum Future Contracts.
It is second time when Hasdex has filed for Ethereum ETF with SEC. In 2021 , SEC rejected Hashdex’s Spot Ethereum ETF Application saying they are worried about market manipulations and investor protection.
Hybrid ETF is a type of ETF which tracks the performance of an basic asset through combination of future’s contracts and physical assets. It can be considered as compromise between Spot ETF, which tracks the price of underlying asset directly, and a futures ETF, which tracks tracks the price of that asset through Futures Contracts.
SEC has not made any decision on the Application of Hashdex. However, filing is an important positive step for future of Crypto ETF in United States of America. If their Application is Approved , then Hashdex Nasdaq Crypto Index ETF will be first Ethereum ETF to be traded in United States.
The Growing Demand for Crypto ETFs
The demand of Crypto ETF is growing rapidly. As in 2022, there were over $1 billion as asset under management in the form of Crypto ETF worldwide . It was only $10 million in the year 2020.
The increase in Crypto ETF’s is due to many factors, which includes:
- Increased popularity amongst the institutional investors.
- The Clarity in regulation of Cryptocurrency.
- The investors interest in the investment in Crypto market without buying and Storing Cryptocurrencies Directly.
The SEC’s Concerns About Crypto ETFs
The SEC’s has not yet Approved Bitcoin Spot ETF till date, so it might be dream to think of approval of Spot Ethereum ETF. The Agency is worried about a number of concerns about Crypto ETF, which are including:
- The lack of a regulated market for cryptocurrencies.
- The potential for market manipulation.
- The risk of fraud and investor protection
However, SEC is acknowledging the growth in demand of Crypto ETF’s so there might be an possibility of their Approval’s in near future.
The Future of Crypto ETFs in the United States
The future of Crypto ETF’s is uncertain in United States of America. However, Filing by Hashdex is an Positive Sign, that SEC is taking a more favourable approach towards these products. If it is approved, then Hashdex Nasdaq Crypto Index ETF will be an milestone in Crypto ETF industry, and there will be strengthening of path for Crypto ETF’s application in near future.
The Impact of a Hybrid Ethereum ETF
There will be positive impact on Crypto Industry after approval of Hybrid Ethereum ETF’s Approval. First, it will provide an safe and convenient method to investors for investment in Ethereum. Second, It will help in validating the Crypto market and will also attract the institutional investors. Third, it will help in increasing the liquidity in the Ethereum market.
Ultimately, Hybrid Ethereum ETF’s approval will be an big win for Crypto Industry and Will increase the growth in there development.
Conclusion
Filing of Hybrid Ethereum ETF by Hashdex is an positive sign for the future of Crypto ETF’s in United States of America. If the application is approved, the Ethereum ETF will be first Crypto ETF to be traded on American Exchanges and will help in validating the Crypto ETF market and will also help in attracting the institutional Investors. Ultimately, Hybrid Ethereum ETF’s approval will be an big win for Crypto Industry and Will increase the growth in there development.