Asset management firm Hashdex has submitted a second amended application for its proposed Nasdaq Crypto Index US ETF, a fund designed to offer investors a comprehensive cryptocurrency portfolio. The updated filing, submitted to the Securities and Exchange Commission (SEC) on November 25, highlights ongoing progress in bringing a diversified crypto index fund to the U.S. market.
Hashdex first amended its S-1 application in October after the SEC requested additional time to evaluate the proposal. The fund initially plans to focus on Bitcoin but could expand to include other digital assets over time, according to the filing.
Crypto Index ETFs: The Next Frontier
Industry experts believe crypto index ETFs are set to follow the momentum of Bitcoin and Ethereum ETFs, which debuted in January and July, respectively.
“Index ETFs are a natural progression. Investors value efficiency, much like they do with products like the S&P 500 ETF. Crypto will follow the same path,” said Katalin Tischhauser, head of investment research at crypto bank Sygnum, in a prior interview.
Hashdex’s ETF would track the Nasdaq Crypto US Index, offering a streamlined option for investors seeking exposure to Bitcoin with potential diversification into other cryptocurrencies in the future.
Regulatory Landscape: Changing Tides for Crypto ETFs
The SEC’s regulatory stance on cryptocurrencies could shift following the election of Donald Trump, who has pledged to establish the U.S. as a global hub for crypto innovation. On November 21, SEC Chair Gary Gensler, known for his strict regulatory approach to digital assets, announced his intention to step down on January 20, 2025, the same day Trump is set to begin his second term.
Trump has been vocal about his plans to reshape the SEC, even stating he would “fire” Gensler to appeal to crypto supporters during his campaign. The anticipated leadership change could pave the way for increased acceptance of crypto-focused financial products like index ETFs.
Competition in the Crypto Index ETF Space
Hashdex is not alone in pursuing a cryptocurrency index ETF. Major players like Franklin Templeton and Grayscale are also preparing to launch similar products.
- Franklin Templeton’s Crypto Index ETF: This fund aims to track the CF Institutional Digital Asset Index, which currently focuses on Bitcoin and Ethereum.
- Grayscale Digital Large Cap Fund: Established in 2018, this fund provides exposure to a broader range of cryptocurrencies, including Bitcoin, Ethereum, and Solana, though it has yet to be listed as an ETF.
Grayscale’s approach stands out by incorporating alternative cryptocurrencies into its portfolio, potentially appealing to investors seeking exposure beyond Bitcoin and Ethereum.
The race to bring crypto index ETFs to U.S. markets underscores growing demand for streamlined, diversified investment options. With a shifting regulatory environment and heightened competition among asset managers, 2024 could be a pivotal year for cryptocurrency ETFs.
