Hashdex Advances with Second Amendment for Nasdaq Crypto Index US ETF Approval

Hashdex, a prominent asset management firm, is steadily advancing its efforts to unveil a cryptocurrency-centric exchange-traded fund (ETF) in the United States. As of November 25, the company disclosed that it has submitted a second amended S-1 application to the U.S. Securities and Exchange Commission (SEC). This marks a significant milestone in its quest to bring the Nasdaq Crypto Index US ETF to market.

The latest submission from Hashdex underscores its commitment to addressing the necessary regulatory hurdles for the Nasdaq Crypto Index US ETF. This ETF is designed to offer investors a diversified portfolio of cryptocurrencies, initially comprising bitcoin (btc) and Ether (eth), the two digital currencies currently featured in the Nasdaq Crypto US Index. The filing suggests the potential for the portfolio to include additional cryptocurrencies in the future.

The current amendment follows an October adjustment to Hashdex’s initial S-1 application, prompted by the SEC’s request for more time to evaluate the proposal. Historically, the SEC has exhibited caution when it comes to the approval of cryptocurrency-related products. Hashdex’s ongoing amendments highlight its dedication to aligning with regulatory standards. Despite the SEC’s cautious stance, numerous firms continue to pursue approval for spot exchange-traded funds (ETFs), with WisdomTree recently filing for an ETF involving XRP.

The burgeoning interest in crypto index ETFs reflects a growing demand among investors for diversified investment vehicles within the cryptocurrency space. Industry experts often liken these ETFs to conventional index funds such as those that track the S&P 500, which offer investors broad market exposure.

“Similar to how investors utilize the S&P 500 in an ETF format, crypto index ETFs provide an efficient investment approach,” remarked Katalin Tischhauser, head of investment research at Sygnum, a financial institution focused on cryptocurrencies.

Hashdex is not navigating the regulatory landscape alone. Other notable asset managers, including Franklin Templeton and Grayscale, are also seeking approval for related products. Franklin Templeton’s proposed Crypto Index ETF aims to follow the CF Institutional Digital Asset Index, currently concentrating on Bitcoin and ethereum. Meanwhile, Grayscale has applied for their Digital Large Cap Fund, which includes a mix of cryptocurrencies like Bitcoin, Ethereum, solana (SOL), and XRP, to be converted into an ETF.

The regulatory environment surrounding cryptocurrency ETFs in the United States may evolve significantly in the coming months. Gary Gensler, the current Chair of the SEC, has announced plans to resign on January 20, 2025. This departure coincides with the onset of Donald Trump’s second presidential term. Trump, who is known for his pro-crypto views, has criticized Gensler’s stringent regulatory approach and proposed reforms aimed at encouraging growth in the blockchain sector.

According to regulatory analysts, the leadership transition at the SEC could influence the approval process for financial products linked to cryptocurrencies. Bloomberg ETF analyst James Seyffart expressed that the approval of index ETFs, which include Altcoins like XRP and Solana, may hinge on the SEC’s assessment of whether these smaller assets comply with existing regulations.

Seyffart explained, “Concerns about altcoins in index ETFs might diminish if the majority of the fund’s allocation is toward Bitcoin and Ethereum.” He further noted that while there is optimism regarding these products, the ultimate decisions will likely be dictated by the incoming SEC administration’s priorities and strategic direction.

As the conversation around cryptocurrency ETFs continues to evolve, market participants remain attentive to the regulatory developments that could shape the future landscape of digital asset investment.