Latest Updates on Ethereum ETFs from Bitwise and Hashdex
Alina - 19/06/2024
Last week, issuers of spot Ethereum ETFs received feedback from the SEC on finalizing their S-1 forms by June 19.
Summary of the Spot Ethereum ETF Approval Process
While the SEC approved the 19b-4 forms for spot Ethereum ETFs in May, the regulatory body still needs to approve the effective S-1 prospectus for these funds to begin trading. The forms are currently being revised and resubmitted to the SEC for further comments and are not yet official.
Bloomberg's ETF analyst Eric Balchunas shared on June 15 that similar comments about the progress of the S-1 prospectus had been heard. He mentioned that the earliest possible launch date for spot Ethereum ETFs is July 2.
The SEC has not specified when the S-1 forms will be approved, other than indicating they will be approved this summer. SEC Chairman Gary Gensler stated that the timing will largely depend on how quickly issuers respond to the agency's feedback.
The impact of Ethereum ETFs remains unclear, but some analysts predict that investment flows could reach up to 20% of those of Bitcoin ETFs.
Bitwise Updates S-1 Filing, Initial Capital Could Reach $125 Million
On June 18, Bitwise updated its registration form for trading Ethereum ETFs as an asset management company.
Notably, Bitwise added new details in the updated S-1 prospectus for the Bitwise Ethereum ETF, including a $2.5 million seed round. The company stated, "Bitwise Investment Manager, a subsidiary of the sponsors, is expected to purchase a basket of shares worth $2.5 million, with each share priced at $25, totaling 100,000 shares."
Additionally, Bitwise revealed that leading market investment firm Pantera Capital is interested in purchasing up to $100 million worth of shares.
The asset management company noted, "However, as expressions of interest are not binding purchase agreements, potential buyers may decide to buy more, less, or no shares."
Bloomberg ETF analyst James Seyffart commented on June 18, "There is no certainty that the information in this filing will take effect. The filing may not require any additional updates or may need to be revised. However, final approval from the SEC is necessary."
Bitwise is the latest company to update its forms after the SEC approved 19b-4 forms for eight Ethereum ETFs last month. Issuers still need their S-1 filings to become effective before trading can begin.
Hashdex Proposes New ETF Holding Both Ethereum and Bitcoin Spot
Also on June 18, Nasdaq posted a proposal to approve a 19b-4 form for the Hashdex Nasdaq Crypto Index US ETF. The filing reveals that crypto asset management firm Hashdex plans to launch an ETF for both Bitcoin and Ethereum spot.
James Seyffart shared his view on the dual Bitcoin and Ethereum ETF in a post, "It will be weighted by market capitalization. The reduced number of ETF filings from Hashdex is not surprising as this makes a lot of sense."
Hashdex decided not to proceed with its spot Ethereum ETF proposal. Unlike BlackRock and Fidelity, which received SEC approval for their 19b-4 forms, Hashdex has yet to receive feedback from the SEC on its latest filing revisions.
According to Hashdex's 19b-4 form, the Hashdex Nasdaq Crypto Index US ETF will also hold cash. Coinbase Custody Trust Company will be the custodian for the Ethereum spot ETF, and BitGo Trust Company will serve as the custodian if the fund launches. Hashdex also noted that it would not invest in any other spot cryptocurrencies besides Bitcoin and Ether.
"The trust will not invest in crypto securities, tokenized assets, or stablecoins," the filing stated.
However, James Seyffart pointed out that Hashdex's filing allows for the inclusion of other digital assets if the SEC gives the "green light."
