Hashdex Clarifies SEC Concerns; Spot Bitcoin Adding to Futures ETF on the Horizon
Summary:
Asset management firm Hashdex recently clarified the U.S. Securities and Exchange Commission (SEC)'s concerns over its proposal for the Hashdex Bitcoin Futures ETF to add spot Bitcoin. The company does not have an agreement with crypto exchange Coinbase, but proposes to obtain spot BTC from physical exchanges within the CME market, basing all its transactions on CME pricing. If the proposal gets approved, the ETF will be permitted to include spot Bitcoin. In addition, several prominent asset management corporations are striving to launch the first spot Bitcoin ETF in the U.S, indicating that approvals may be on the horizon.
Hashdex, the asset management firm, recently conducted a discussion with the U.S. Securities and Exchange Commission (SEC) to clarify issues over its application for the Hashdex Bitcoin Futures ETF to include spot Bitcoin, a confidential source disclosed to Cointelegraph. Division of Trading Markets made public that the discussion happened on October 13, involving six representatives from the SEC, Hashdex, NYSE Arca, Tidal Financial Group, and the legal firm K&L Gates. During this talk, Hashdex explained its mechanism that facilitates trading and holding of spot Bitcoin within the ETF on the Chicago Mercantile Exchange, overseen by the Commodity Futures Trading Commission. Hashdex's approach is unique from other Bitcoin applications as it lacks a surveillance-sharing agreement with cryptocurrency exchange Coinbase. Instead, its plan involves securing spot BTC from physical exchanges within the CME market, making its transactions entirely reliant on CME pricing, as detailed in NYSE Arca's SEC filing in late August. Hashdex outlined its strategy to SEC members during the October discussion, a strategy that hinges on the Teucrium Order provided by the commission, validating that the Bitcoin futures market is adequately mature to back financial products looking to gain BTC exposure. Following this, the SEC might request additional details prior to the first application deadline of November 17, the insider stated. Hashdex claims to manage over $380 million in assets and 14 ETPs across seven nations. ETPs are investment vehicles backed by a cryptocurrency token. The firm's Bitcoin Futures ETF was greenlighted by the SEC in April 2022 and was listed on NYSE Arca since September last year. If the proposed rule modification gets approved, the ETF will be eligible to include spot Bitcoin as well. Around the same time, several large-scale asset management firms are competing to introduce the first spot Bitcoin ETF in the U.S. BlackRock's ETF suggestion was recently registered on the Depository Trust & Clearing Corporation (DTCC), which indicates an approval might be imminent, Bloomberg ETF analyst Eric Balchunas pointed out. "The prevalent opinion is that the SEC will give the green light to all spot ETFs in the next three months," the informant added.
Published At
10/25/2023 9:50:00 PM
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