The New Frontier: Hashdex’s Audacious Move in the Bitcoin ETF Arena
As the race to secure the U.S. Securities and Exchange Commission’s (SEC) approval for Bitcoin ETFs intensifies, a new entrant is making waves: Hashdex, Brazil’s leading crypto asset management firm with a hefty $435 million under its aegis.
With a legacy of being the first to introduce a crypto index ETFs in Brazil (and globally), the firm is now gearing up for a bigger challenge, as it takes on the might of BlackRock.
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Rekindling Interest and Taking a Different Tack
The past has seen the SEC keep Bitcoin ETF applications at bay. But when investment powerhouse BlackRock tabled its Bitcoin spot ETF application in June, the industry was abuzz once again.
Not only did it ignite interest, but it also instigated other firms to follow suit. Many sought refuge in a surveillance-sharing agreement with Coinbase, a behemoth in the crypto exchange arena, in a bid to counter potential fraudulent activities.
Yet, Hashdex has chosen to carve a distinct path. According to their filing, their strategy focuses on acquiring spot Bitcoin directly from the revered and regulated Chicago Mercantile Exchange (CME).
With an existing stronghold in the Bitcoin futures ETF domain, their proposal, as outlined in their NYSE Arca submission, is to lean on the Exchange for Physical (EFP) Transactions.
This means they’d engage in the buying and selling of spot Bitcoin while steering clear of the unpredictable waters of unregulated exchanges. It’s an approach that might just give the SEC the assurance they seek, showcasing a method rooted in a closely-regulated environment.
Going Against The Grain
But, as with all tales, there are contrasting views. While many industry players have partnered with Coinbase in the surveillance-sharing arena, including stalwarts like Valkyrie, Wise Origin, and VanEck, Hashdex has voiced reservations.
In a recent post, they’ve pointed out a glaring gap—there’s no evidence to suggest this widely adopted approach addresses the SEC’s primary concerns.
Who Is Hashdex?
Hashdex is a crypto asset firm based in Rio de Janeiro, Brazil. The company stands out as a dominant figure in the crypto asset management landscape of Latin America, and are co-developers of the Nasdaq Crypto Index (NCI) and the Nasdaq Crypto Index Europe (NCIE).
And in collaboration with Nasdaq, Hashdex launched the “Nasdaq Advisor Academy: Digital Assets,” a pioneering initiative aimed at furnishing professional investors with the educational tools they require to adeptly navigate the intricacies of this emerging asset class.
As they now set their sights on securing approval for the pioneering US spot ETF, the journey might present diverse challenges. Nevertheless, their objective is clear: convincing U.S. regulatory authorities of their dedication and rigor.
The Bitcoin community waits with bated breath to see if Hashdex’s novel approach will set a precedent for subsequent Bitcoin ETF green lights. Either way, an approval has never been closer.