Hashdex Enters Bitcoin Spot ETF Race With Unique Application

Digital asset management firm Hashdex has filed a spot Bitcoin ETF application with the United States Securities and Exchange Commission, according to reports on Friday, August 25. 

Hashdex, who claims to be a global pioneer in crypto management, is looking to hold spot Bitcoin in its Bitcoin futures ETF, rebranding its DEFI ETF on the New York Stock Exchange (NYSE) to now Hashdex Bitcoin ETF. 

Hashdex Snubs Coinbase SSA, Introduces Unique ETF Arrangement

Following an influx of spot Bitcoin ETF applications in June, the Wall Street Journal reported that the SEC had judged most of these filings as “inadequate,” stating they lacked clarity, especially in regard to their surveillance-sharing agreements.

In response to this development, several asset managers re-submitted their applications naming the Coinbase exchange as their market surveillance provider to improve the chances of approval by the SEC.

However, entering into the spot Bitcoin ETF race, Hashdex has decided to not pursue a Coinbase surveillance sharing agreement (SSA), as they believe there is “no evidence that this addresses the SEC concerns.” 

In addition, Hashdex is looking to avoid employing the services of an unregulated Bitcoin spot exchange. 

*VERY INTERESTING* 19b-4 filed by NYSE on DEFI ETF…

Changing name to Hashdex Bitcoin ETF & updating strategy to hold spot btc.

Notably, this filing isn’t relying on Coinbase SSA.

Instead will secure spot btc through CME Market’s Exchange for Physical.https://t.co/dBLjCNvAki pic.twitter.com/kmXETHUqB0

— Nate Geraci (@NateGeraci) August 25, 2023

Rather, the asset manager would be relying on the CME’s Exchange for Physical (EFP) transactions to fortify its Bitcoin spot ETF arrangement. 

For context, EFP refers to a particular type of Exchange for Related Position (EFRP) transaction applicable across all Chicago Mercantile Exchange (CME) equity index futures in which investors are able to effortlessly switch between futures and either ETFs or collections of underlying index constituent stocks without exposure to intra-market day volatility. 

Essentially, as earlier stated, Hashdex aims to introduce an ETF mixture of spot and future positions. 

So far, Hashdex’s unique ETF application has received lots of applause, with Nate Geraci, President of the ETF Store, describing it as a “brilliant move.” In addition, Alistair Milne, founder of Altana Digital Currency Fund, has stated that this particular application would be “hard to reject,” in his opinion. 

The Spot Bitcoin ETF Race Heats Up

Following its recent ETF application, Hashdex joins a host of several asset managers looking to launch the first-ever spot Bitcoin ETF in the US. This list includes BlackRock, Invesco, Bitwise, Valkyrie, Fidelity, WisdomTree, ARK Invest, etc.

Earlier in August, Mike Novogratz stated that inside sources at Blackrock and Invesco believe a spot Bitcoin ETF approval by the SEC is merely a matter of time ranging from four to six months. 

However, the former SEC chief of Internet Enforcement, John Stark Reed, presented a negative outlook on this saga, saying the chances for a spot in Bitcoin ETF are “slim and none” and the crypto space is “totally rigged.” 

In other news, the general crypto market has experienced a slight boost of 0.13% in the last week, moving the total crypto cap to $1.03 trillion, according to data from Tradingview.

Total crypto market cap valued at $1.03 trillion on the weekly chart | Source: TOTAL chart on Tradingview.com

Featured image from Formula E, chart from Tradingview