Hashdex’s bitcoin futures ETF was approved under a new securities framework than normal, signaling the possibility of a spot ETF. Although a bitcoin ETF is yet to be launched, Hashdex’s approval opens the door for a new regulatory conversation.
Hashdex has launched a new bitcoin futures exchange traded funds (ETF). This could change the game for those who are looking to invest in traditional bitcoin ETFs.
After receiving approval from the Securities and Exchange Commission, the Hashdex Bitcoin Futures Exchange Traded Fund (ETF) is set to list on NYSE Arca tomorrow under the ticker #DEFI. Although the product isn’t new, multiple Bitcoin futures ETFs have reached market. However, the wrapper is. It was approved under the Securities Act of 1933. This approval could be used to obtain SEC approval for other bitcoin futures ETFs.
The ETF will be listed tomorrow, Friday 16th Sept on NYSE Arca
Multiple futures-based products were listed under the Investment Company Act of 40. Gavin Filmore (COO of Toroso Investments), stated that they cannot be physical products. However, a ’33 Act could. Even if the crypto product is another futures fund, approval under the ’33 Act could be considered a significant shift in regulatory sentiment.
Filmore stated that a market participant with a good understanding of these wrappers, and the nuances within them, and what this could mean for regulatory approval, would agree that this is a fair view. Filmore spoke to The Block in an interview. It’s all about the wrapper. It’s not the product. It’s not about the product.
To date, the SEC appears to be reluctant in approving crypto products under the “33 Act.” SEC Chair Gary Gensler stated that he would be interested in approbating bitcoin futures products as per the Investment Company Act of 40, which effectively shut off approval for spot-based products.
Hashdex Bitcoin ETF Ticker Name will be #DEFI
The ’40 Act regulates mutual funds, investment companies and their product offerings. While the ’33 Act outlines a registration process and disclosure process for securities offering. The ’40 Act prohibits the sale of physical products. However, the 33 Act permits a wider range of securities offerings that include a wide variety of assets.
Filmore stated that Hashdex was originally going to be the first to launch the futures ETF. However, it had to wait for regulatory approvals which led to delays. Brazilian firm filed its application under the 33 Act prior to the listing of the first bitcoin futures ETF, PROShares’ $BITO in October 2021. The ’33 route was chosen not because of novelty but because it seemed to be the most efficient wrapper for the product. This is primarily due to tax efficiency.
Bruno Souza, Hashdex’s head of new markets, stated that the regulatory process for crypto products seems to focus more on how the product works than the overall crypto market. He said this was a positive.
Souza stated that he believes there is a normalization in the asset class. He said that everyone involved with crypto since its beginnings knew that it was coming.
It has been a long journey that led to it listing in a down market. ProShares’ $BITO is down 70% since it went public, reflecting wider market turmoil.