Hashdex has officially withdrawn its proposal for a spot Ethereum ETF, following the U.S. Securities and Exchange Commission's (SEC) approval of similar proposals from eight other issuers.

Hashdex Withdraws Spot Ethereum ETF Proposal

Nasdaq filed the notice of withdrawal for the Hashdex Nasdaq Ethereum ETF on Tuesday, signaling a shift in the company's direction. This decision came in the wake of the SEC approving 19b-4 forms for eight Ethereum ETFs from traditional players like VanEck, Fidelity, Franklin, Grayscale, Bitwise, ARK Invest & 21Shares, Invesco & Galaxy, and BlackRock's iShares Ethereum Trust.

Impact on the Ethereum Investment Market

The approved ETFs are expected to provide the Ethereum investment market with a new level of openness and turnover, which will likely have an impact on the market. Hashdex's initial filing with the SEC was made in September, and it planned to launch a fund that would invest in Ether, Ether futures contracts on the CME, and cash equivalents.

Public Comments and Lawmakers' Responses

The proposed ETF received a number of public comments before the 19b-4 forms were approved, including comments from lawmakers. Democratic Senators expressed their concerns and requested the SEC not to approve spot Ethereum ETFs, while Republican Representatives French Hill of Arkansas, Tom Emmer of Minnesota, and Josh Gottheimer of New Jersey urged for approval in a letter.

SEC's Shift in Position Regarding Ethereum

While rejecting the Hashdex proposal, the SEC's acceptance of the eight other Ethereum ETFs shows a shift in its position toward regarding Ethereum as a commodity. However, their S-1 registration statements must be effective before these issuers can trade. The SEC has recently started talking with issuers concerning their S-1 forms, although the approval timeframe still needs to be determined.

Market Expectations and Analysts' Predictions

Bloomberg analyst Eric Balchunas has suggested that the market reaction to Ethereum ETFs will not be as enthusiastic as the reaction to Bitcoin ETFs. He initially predicted that Ethereum ETFs could trade only one-tenth of the volume of Bitcoin ETFs but has since adjusted the number to one-fifth. Another Bloomberg ETF analyst, James Seyffart, predicts that trading may commence as early as July or August, given the timely approval of the S-1 documents.

The withdrawal of Hashdex's spot Ethereum ETF proposal and the SEC's approval of similar proposals from eight other issuers highlight the evolving regulatory landscape surrounding Ethereum and the growing interest in providing investors with regulated exposure to the cryptocurrency.