The SEC on Thursday finally approved the first spot ETFs that combine Bitcoin and Ethereum, after months of extended reviews.
On Dec. 19, the agency approved Hashdex’s Nasdaq Crypto Index US ETF, allowing it to trade on the Nasdaq stock market. At the same time, it authorized Franklin Templeton’s Franklin Crypto Index ETF for listing on the Cboe BZX Exchange.
Both indexes will hold spot Bitcoin and spot Ether directly. The Franklin Crypto Index ETF will track the Institutional Digital Asset Index, designed to reflect the performance of digital assets such as Bitcoin and Ether. Meanwhile, Hashdex’s Crypto Index ETF will follow Bitcoin and Ether as part of the Nasdaq Crypto US Settlement Price Index.
Market-Cap Weighted Bitcoin-Ether ETFs Set for January Debut
Senior Bloomberg ETF analyst Eric Balchunas predicted a January launch for both funds. He said that these ETFs are market-cap weighted, with around 80% allocated to Bitcoin and 20% to Ethereum.
The approvals came from amended filings where the Trusts’ structure and terms mirrored previously approved spot Bitcoin and Ether ETPs under earlier SEC orders.
The SEC also determined that the spot Bitcoin market closely aligns with the CME Bitcoin futures market, while the spot Ether market shows a similar correlation with the CME Ether futures market. Based on this correlation and its analysis, the SEC concluded that the surveillance-sharing agreements between the Exchanges and the CME could effectively detect and prevent fraudulent or manipulative activities tied to these proposals.
Additionally, the SEC confirmed that the proposals met the Exchange Act’s standards, including rules to prevent fraud and manipulation, safeguard investors and support public interest.
Hashdex Eyes Broader Market Appeal With Multi-Asset ETF
Hashdex earlier announced that its multi-asset ETF will initially focus on Bitcoin and Ethereum, with plans to potentially add Solana and Cardano in the future. By diversifying the ETF’s holdings across several major digital assets, the firm aims to minimize the volatility often associated with single-asset ETFs.
This diversified strategy could attract a broader audience, appealing to both risk-averse investors and those seeking broader exposure to the digital asset market.
ETFs have become increasingly popular because they offer a simple and regulated way to invest in a variety of assets.
Nate Geraci, president of The ETF Store, said it would be interesting to see if BlackRock or other firms might adopt a similar approach and introduce comparable ETFs.
“Regardless, I expect there will be meaningful demand for these products. Advisors LOVE diversification. Especially in an emerging asset class such as crypto,” he said.
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