- Hashdex proposes a hybrid ETF tracking Bitcoin and Ethereum, aimed at simplifying cryptocurrency investments through public markets.
- The ETF will be capitalization-weighted, with Bitcoin making up 70.54% and Ethereum the remainder, adjusted quarterly.
Brazilian cryptocurrency asset manager Hashdex is poised to introduce a new financial product aimed at investors seeking diversified exposure to the leading digital currencies. The proposed hybrid spot exchange-traded fund (ETF) would track both Bitcoin and Ethereum, offering a structured investment vehicle for those interested in the cryptocurrency market without the complexities of direct trading and holding.
This innovative ETF, if approved, aims to provide investors an accessible pathway to invest in Bitcoin and Ethereum through the public securities market. According to Hashdex’s filing, the ETF is designed to offer a simple method for obtaining investment exposure, eliminating the need for direct acquisition and management of cryptocurrencies on peer-to-peer platforms or through crypto asset platforms.
Hashdex Plans to Manage this ETF with a Capitalization-weighted Approach
Initially, Bitcoin will constitute 70.54% of the portfolio, reflecting its current market dominance, with Ethereum making up the remainder. The company will review and adjust these weightings quarterly to accurately mirror shifts in market value.
To ensure the security and integrity of the fund, Hashdex intends to employ multiple custodians, specifically BitGo and Coinbase, to handle the assets. This strategy is part of a broader approach to mitigate risks associated with cryptocurrency investments.
Moreover, Hashdex has indicated the potential to include other digital currencies in the ETF in the future. However, any such additions would require approval from the U.S. Securities and Exchange Commission (SEC), ensuring regulatory compliance and investor protection.
Hashdex is not new to managing crypto-focused investment products
In Brazil, their existing crypto index ETF includes a broader array of crypto assets like Solana, XRP, Cardano, Litecoin, and Polygon, alongside Bitcoin and Ethereum. This diverse inclusion positions them as experienced managers in the crypto ETF space.
James Seyffart, analyst from Bloomberg Intelligence, supports the idea of such a product reaching the U.S. market, suggesting it aligns well with the needs of investors looking for broader utility beyond what Bitcoin currently offers.Â
@hashdex already has a crypto index ETF that's traded down in Brazil. These are the assets it currently holds and their weights in the fund. 90% is Bitcoin and Ethereum. pic.twitter.com/5yRCDsfUs0
— James Seyffart (@JSeyff) June 18, 2024
He emphasized that this product would serve advisors and investors looking for comprehensive exposure to the dynamic cryptocurrency market.
