Hashdex Joins Race for Spot Bitcoin ETF with Unique Strategy

Bringing the Heat in the Race for a Bitcoin ETF

Crypto asset management company Hashdex has thrown its hat into the ring, vying for a spot Bitcoin ETF in the United States. With its strong track record in the field, Hashdex has submitted an application to the U.S. Securities and Exchange Commission (SEC) for a Bitcoin futures ETF that will hold actual spot Bitcoin.

Understanding ETFs: A Traditional Twist on Crypto

Exchange-traded funds, or ETFs, are investment funds that are traded on a stock market and derive their value from a selection of underlying assets, such as stocks, bonds, commodities, and other financial instruments. In the case of Bitcoin ETFs, they track the value of Bitcoin and trade on traditional stock exchanges rather than crypto exchanges.

A Different Approach to Other Submissions

Hashdex is taking a unique route with its Bitcoin ETF application. Unlike recent filings, the company will not rely on the Coinbase surveillance sharing agreement. Instead, it plans to acquire spot Bitcoin from physical exchanges within the CME market. In a filing with the US SEC, Hashdex outlined its intention to include spot Bitcoin in its Bitcoin futures ETF and change the name to "Hashdex Bitcoin ETF," replacing the DeFi ticker.

Analyzing the Experts

Analysts have weighed in on Hashdex's approach. James Seyffart, an analyst at Bloomberg, highlighted that the strategy involves exclusively conducting Exchange for Related Positions (EFRP) transactions. This means swapping futures contracts for an equivalent spot exposure, rather than making direct cash purchases from exchanges. Seyffart believes this method increases the likelihood of SEC approval, especially given the recent pressure on SEC Chair Gary Gensler from various factors, including the Grayscale lawsuit, the Ethereum futures submission, and BlackRock incorporating the Coinbase surveillance sharing agreement.

Other specialists, including Nate Geraci, President of The ETF Store, investor Alistair Milne, and finance attorney Scott Johnsson, have also commented on Hashdex's distinctive Bitcoin ETF submission. They believe it could address some of the SEC's concerns about Bitcoin market manipulation and liquidity.

Awaiting the SEC's Response

At present, the SEC and Gary Gensler have not provided any feedback regarding spot Bitcoin ETF applications, the influx of Ethereum ETFs, or the potential approval of a spot Bitcoin ETF within this year.