Asset management firm Hashdex has made further progress toward launching a cryptocurrency-focused exchange-traded fund (ETF) in the United States. According to an announcement on Nov. 25, the company has submitted its second amended S-1 application with the U.S. Securities and Exchange Commission (SEC).

Hashdex Second Amendment for Nasdaq Crypto Index US ETF

Hashdex’s latest filing represents another step in its ongoing efforts to secure regulatory approval for the Nasdaq Crypto Index US ETF. The ETF aims to provide investors with exposure to a diversified portfolio of cryptocurrencies.

Initially, the fund will include Bitcoin (BTC) and Ether (ETH), the only two assets currently listed in the Nasdaq Crypto US Index. However, the filing noted that the portfolio could expand to include other digital currencies over time.

The amended filing comes after Hashdex’s initial S-1 application was modified in October when the SEC sought additional time to review the proposal. The SEC has historically been cautious in approving cryptocurrency-related products, and the amended filings demonstrate Hashdex’s ongoing compliance efforts to meet regulatory requirements. Despite the US SEC’s stance, firms have continued to file for Spot exchange-traded fund (ETF) like the latest one by WisdomTree for an XRP ETF.

Growing Interest in Crypto Index ETFs

Crypto index ETFs have emerged as a key area of focus for asset managers as demand for diversified investment products grows. Industry observers compare these ETFs to traditional index funds, such as those tracking the S&P 500, which provide investors with broad market exposure.

“Index ETFs are efficient for investors — just like how people buy the S&P 500 in an ETF. This will be the same in crypto,” said Katalin Tischhauser, head of investment research at Sygnum, a cryptocurrency-focused financial institution.

Hashdex is not alone in its pursuit of a cryptocurrency index ETF. Other asset managers, such as Franklin Templeton and Grayscale, are also seeking approval for similar products. The Franklin Crypto Index ETF would track the CF Institutional Digital Asset Index, which, like the Nasdaq Crypto US Index, currently focuses on Bitcoin and Ethereum. Grayscale’s Digital Large Cap Fund, which holds a basket of cryptocurrencies including Bitcoin, Ethereum, Solana (SOL), and XRP, has also applied for conversion to an ETF.

Potential Regulatory Changes and Market Implications

The regulatory landscape for cryptocurrency ETFs in the United States could shift significantly in the coming months. The SEC’s current Chair, Gary Gensler, has announced plans to step down on Jan. 20, 2025. This timeline coincides with the start of Donald Trump’s second presidential term. Trump, who has expressed a pro-crypto stance, has previously criticized Gensler’s strict approach to cryptocurrency regulation and promised reforms aimed at fostering growth in the sector.

Regulatory analysts suggest that the leadership transition at the SEC may impact the approval process for cryptocurrency-related financial products. Bloomberg ETF analyst James Seyffart stated that approval for index ETFs holding altcoins like XRP and Solana may depend on whether the SEC considers these smaller assets compliant with existing rules.

“Regulatory concerns about altcoins in index ETFs could be reduced if most of the allocation remains in Bitcoin and Ethereum,” Seyffart explained. He added that while there is optimism about these products, the ultimate decisions will likely hinge on the incoming SEC administration’s priorities and approach.

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Kelvin Munene Murithi

Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

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