Hashdex is advancing its application for a Nasdaq cryptocurrency index U.S. ETF, aiming to diversify cryptocurrency investment with Bitcoin and Ethereum as core assets.
Asset management company Hashdex has made further progress in launching a cryptocurrency-focused exchange-traded fund (ETF) in the U.S. According to a November 25 announcement, the company has submitted a second amended S-1 application to the U.S. Securities and Exchange Commission (SEC).
Hashdex is making a second amendment to its Nasdaq cryptocurrency index U.S. ETF.
Hashdex's latest application represents another step in its ongoing efforts to obtain regulatory approval for the Nasdaq cryptocurrency index U.S. ETF. The ETF aims to provide investors with a diversified cryptocurrency portfolio.
Initially, the fund will include Bitcoin (BTC) and Ethereum (ETH), the only two assets currently in the Nasdaq cryptocurrency U.S. index. However, the document notes that over time, the portfolio may expand to include other digital currencies.
The amended application was submitted after Hashdex's initial S-1 application was modified in October, when the SEC requested more time to review the proposal. The SEC has historically taken a cautious approach to approving cryptocurrency-related products, and the amended application indicates that Hashdex is continuing to work to meet regulatory requirements. Despite the SEC's stance, companies continue to apply for spot exchange-traded funds (ETFs), such as WisdomTree's latest application for an XRP ETF.
There is growing interest in cryptocurrency index ETFs.
As demand for diversified investment products grows, cryptocurrency index ETFs have become a focal area for asset management companies. Industry observers have compared these ETFs to traditional index funds (such as those tracking the S&P 500), which provide investors with broad market exposure.
"Index ETFs are efficient for investors—just as people buy the S&P 500 index through ETFs. The same will be true in the cryptocurrency space," said Katalin Tischhauser, head of investment research at cryptocurrency-focused financial institution Sygnum.
Hashdex is not the only company seeking a cryptocurrency index ETF. Other asset management firms, such as Franklin Templeton and Grayscale, are also seeking approval for similar products. The Franklin cryptocurrency index ETF will track the CF Institutional Digital Asset Index, which, like the Nasdaq cryptocurrency U.S. index, currently focuses on Bitcoin and Ethereum. Grayscale's Digital Large Cap Fund holds a basket of cryptocurrencies, including Bitcoin, Ethereum, Solana (SOL), and XRP, and has also applied to convert to an ETF.
Potential regulatory changes and market impacts
In the coming months, the regulatory landscape for U.S. cryptocurrency ETFs may undergo significant changes. Current SEC Chair Gary Gensler has announced plans to step down on January 20, 2025, coinciding with the start of Donald Trump's second presidential term. Trump has expressed support for cryptocurrencies and previously criticized Gensler's stringent approach to cryptocurrency regulation, promising reforms aimed at fostering industry growth.
Regulatory analysts believe that changes in SEC leadership may affect the approval process for cryptocurrency-related financial products. Bloomberg ETF analyst James Seyffart stated that the approval of index ETFs holding altcoins like XRP and Solana could depend on whether the SEC considers these smaller assets to fit existing rules.
Seyffart explained, "If the majority of the allocation remains in Bitcoin and Ethereum, regulatory concerns about altcoins in the index ETF may diminish." He added that while there is optimism around these products, the final decision may hinge on the priorities and approaches of the incoming SEC leadership.
