Crypto asset manager Hashdex submits an “undeniable” spot Bitcoin ETF application to the SEC
|- Hashdex tailored its Bitcoin ETF application to defeat any and all of the SEC’s arguments to deny its approval.
- The fund will acquire physical Bitcoin from CME-regulated exchanges instead of using Coinbase SSA.
- BlackRock, being recently charged by the SEC, potentially wavered the optimism of spot BTC ETF approval among investors, which Hashdex could correct.
The ongoing spot Bitcoin Exchange Traded Fund (ETF) discourse has resulted in the submission of nearly eight to ten applications. The Securities and Exchange Commission (SEC) has been delaying the approval for the past month for various reasons, but one applicant might have come up with an ETF that could quash all those reasons.
Hashdex creates an “undeniable” Bitcoin ETF
One of the biggest concerns that the SEC has presented to the world for delaying/rejecting the spot Bitcoin ETF applications is the lack of regulation. Its reasoning goes back to the Futures market having the Chicago Mercantile Exchange (CME) as a watchdog, which is absent in the spot market.
To deal with this, one crypto asset manager, Hashdex, has come up with an ETF that sidesteps this concern. According to the filing, the ETF will deploy a strategy of holding physical Bitcoin by purchasing them from CME exchanges instead of spot exchanges. This would mean that, unlike other applicants, Hashdex would not make use of Coinbase for the SSA (surveillance-sharing agreement).
Commending this approach, James Seyfart, a Bloomberg ETF analyst, called the ETF undeniable for the SEC. He tweeted,
“In the event that the SEC finds a way to deny all other #Bitcoin ETFs (not my base case) Hashdex’s application is tailored to every argument SEC has made in the past. I don’t think they’ll be able to deny this one.
Hashdex and NYSE Arca executives recently met with members of the SEC to discuss the regulatory body’s concerns regarding this approach. Thus, if all goes well, Hashdex might manage to beat BlackRock to launch the first-of-its-kind spot Bitcoin ETF.
Optimism in the crypto market
Since BlackRock is considered to be the pioneer of the spot Bitcoin ETF race, developments surrounding it tend to have an impact on the market as well. This was visible in the recent Bitcoin rally when its ETF application was found listed on clearing house DTCC.
Similarly, BlackRock recently faced charges from the SEC and paid a $2.5 million penalty, which put a dent in the bullishness generated by the ETF application. The likes of Hashdex, still moving forward with an “undeniable” spot in Bitcoin ETF, are necessary for reviving this optimism.
Read more - BREAKING: BlackRock to pay $2.5 million penalty after SEC charges it with failing to disclose investment
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