Key Points
Hashdex, an investment management firm, has withdrawn its application for a spot Ether exchange-traded fund (ETF), according to documents filed with the United States Securities and Exchange Commission (SEC).
Hashdex had proposed a rule change that would allow the introduction of its Hashdex Nasdaq Ethereum ETF.
The proposal was withdrawn on May 24, just one day after the financial watchdog approved eight similar financial products.
No details were provided regarding the reason for the withdrawal or whether Hashdex intends to resubmit its proposal in the future.
Spot Ether ETFs – The New Trend
On May 23, the SEC approved the 19b-4 filings from VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise.
This approval paved the way for spot Ether ETFs to be listed and traded on their respective exchanges, with the funds expected to launch in June.
Unlike other applicants, Hashdex’s application for a spot Ether ETF combined spot Ether holdings with Ether futures contracts on the same product.
This approach was intended to mitigate potential manipulation.
Other applicants, such as Fidelity, ARK 21Shares, and Franklin Templeton, have focused on purely spot-based Ether ETFs.
These applicants made late amendments to their filings, such as removing support for Ethereum (ETH) staking in response to SEC feedback.
Furthermore, Hashdex’s ETF aimed to mirror daily fluctuations in the Nasdaq Ether Reference Price to address regulatory concerns about market manipulation.
According to its initial filing from September 2023, the fund would hold a mix of Spot Ether, Ether Futures Contracts, and cash, instead of holding 100% spot Ether, which could make it more susceptible to price manipulation in the spot market.
Hashdex is among the issuers of spot Bitcoin (BTC) ETFs that were approved in January.
Similarly, the company’s BTC fund employed a different strategy from other asset managers.
For instance, Hashdex’s Bitcoin ETF did not rely on the Coinbase surveillance sharing agreement, choosing instead to source spot BTC from physical exchanges within the CME market.
