If approved, the crypto ETF would be the first of its kind, but probably not the last.

Hashdex has proposed the creation of a combined spot Bitcoin (BTC) and Ether (ETH) exchange-traded fund (ETF) on the Nasdaq exchange, according to a filing with the United States Securities and Exchange Commission (SEC) on June 18.

Key Points:

1. ETF Composition: The proposed ETF would allocate its assets according to the market capitalizations of Bitcoin and Ether. As of May 27, it would consist of approximately 70.54% Bitcoin and 29.46% Ether.

2. Passive Investment Strategy: The ETF would adopt a passive investment strategy, tracking the daily market movement on the Nasdaq Crypto US Settlement Price Index without attempting to outperform it.

3. Eligibility Criteria: Crypto assets eligible for inclusion in the ETF must meet specific criteria, including being listed on a U.S.-regulated digital asset trading platform or serving as the underlying asset for a derivative instrument listed on a U.S.-regulated derivatives platform.

4. Custodians: Coinbase and BitGo will serve as custodians for the Bitcoin and Ether assets, respectively, offering segregated accounts for individual shareholders.

5. Innovation in ETF Structures: Hashdex has previously introduced innovative ETF structures, including a Brazilian indexed crypto ETF containing nine coins and a U.S.-traded spot BTC ETF that includes up to 5% BTC futures contracts.

Regulatory Process:

- Hashdex is required to file an S-1 application with the SEC and obtain approval. The agency has 90 days to respond to the 19-b4, during which it will accept public comments on the proposal.
- Analysts expect a final SEC decision on the fund by no later than March 2025.

Conclusion:

Hashdex's proposed combined spot Bitcoin and Ether ETF on the Nasdaq exchange represents an innovative approach to cryptocurrency investment. If approved, it would provide investors with exposure to the two largest cryptocurrencies by market capitalization through a single investment vehicle, potentially expanding access to crypto assets for a broader range of investors.