Nasdaq has submitted an application to the Securities and Exchange Commission (SEC) for listing the Hashdex Nasdaq Ethereum ETF, a pioneering investment fund that combines spot ether holdings and futures contracts. This initiative signifies a shift in cryptocurrency investment strategies within the regulatory framework.

Hashdex Nasdaq Ethereum ETF: A Paradigm Shift

The Hashdex Nasdaq Ethereum ETF is the first Ethereum futures filing of its kind under the ’33 Act. This pioneering approach is under the oversight and supervision of Toroso Investments, a registered commodity pool operator with the Commodity Futures Trading Commission (CFTC) and a member of the National Futures Association.

The surge in cryptocurrency ETF applications has highlighted a critical debate – spot assets versus futures contracts. While the SEC has granted approval for the latter, the former remains unapproved. This dilemma has led fund managers to explore innovative solutions within the regulatory landscape.

Investment Strategy: Mirroring Nasdaq Ether Reference Price

The Hashdex fund’s primary objective is to closely track the daily fluctuations in the Nasdaq Ether Reference Price. To achieve this goal, the fund will allocate its assets to investments in ether, ether futures contracts traded on the CME, as well as cash and cash equivalents.

In the 19b-4 form submitted to the SEC, Nasdaq clarified its strategy:

“Instead of holding 100% spot Ether, which could make it more susceptible to price manipulation in the spot market, the Fund will hold a mix of Spot Ether, Ether Futures Contracts, and cash.”

This strategic shift aims to reduce reliance on the spot market and address concerns related to potential manipulation in unregulated Ether spot exchanges.

Hashdex has also entered the competition for a spot Bitcoin exchange-traded fund in the United States. However, what sets Hashdex apart is its approach. Unlike recent filings dependent on the Coinbase surveillance sharing agreement, Hashdex chooses to acquire spot Bitcoin from physical exchanges within the CME market.

A Competitive Landscape

In the previous week, Ark Invest and 21Shares submitted applications to the SEC for a spot ether ETF, a type of ETF also pursued by VanEck. As of now, the SEC has deferred its determinations on all the applications received for spot cryptocurrency funds.

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