Asset manager Hashdex recently had a meeting with the United States Securities and Exchange Commission (SEC) to address concerns about its application for the Hashdex Bitcoin Futures exchange-traded fund (ETF) to hold spot Bitcoin. The meeting, which took place on October 13, involved six SEC officials and representatives from Hashdex, NYSE Arca, Tidal Financial Group, and law firm K&L Gates.
During the meeting, Hashdex presented its mechanism for trading and holding spot Bitcoin (BTC) in the ETF on the Chicago Mercantile Exchange (CME), which is regulated by the Commodity Futures Trading Commission. Unlike other spot Bitcoin applications, Hashdex’s filing is different because it does not have a surveillance-sharing agreement with crypto exchange Coinbase. Instead, Hashdex proposes acquiring spot BTC from physical exchanges within the CME market, making it solely reliant on CME pricing for transactions.
The presentation shared with SEC officials during the meeting highlighted that the strategy is built on the commission’s Teucrium Order, which asserts that the Bitcoin futures market is developed enough to support financial products seeking exposure to BTC.
According to a source familiar with the matter, the next step for the SEC may involve requesting additional information before the application’s first deadline on November 17.
Hashdex is an asset manager with over $380 million in assets under management and 14 exchange-traded products (ETPs) across seven countries. The SEC previously approved Hashdex’s Bitcoin Futures ETF in April 2022, and the product has been listed on NYSE Arca since September of the same year. If the rule change is approved, the ETF will be able to hold spot Bitcoin as well.
Several major asset managers are currently competing to list the first spot Bitcoin ETF in the United States. BlackRock’s ETF proposal was recently listed on the Depository Trust & Clearing Corporation (DTCC), indicating potential approval in the near future, according to Bloomberg ETF analyst Eric Balchunas.
There is a general consensus that the SEC will approve all spot ETFs within three months, according to the source.
Overall, the meeting between Hashdex and the SEC was an opportunity for the asset manager to address concerns and present its mechanism for allowing spot Bitcoin in the ETF. The outcome of the meeting will likely determine the next steps in the approval process for the Hashdex Bitcoin Futures ETF.