Hashdex is pursuing approval to present a hybrid blend of spot and future contracts Ethereum ETF, with an application submitted by the Nasdaq stock exchange to the United States Securities and Exchange Commission (SEC).
Due to the nature of the application, the share price may differ from the spot price of Ether.
Hashdex Ethereum ETF Aims To Reduce Risks
According to the recent filing, Hashdex plans to introduce a hybrid Ethereum ETF, offering investors exposure to both spot and futures contracts. However, it notes that this endeavor could encounter price fluctuations:
“Because the Fund’s investment objective is to track the price of the Benchmark by investing in Ether and Ether Futures Contracts, changes in the price of the Shares may vary from changes in the spot price of Ether.”
The fund will be managed by Toroso Investments, which believes that the investment strategy aims to reduce manipulation by diversifying holdings and addresses the SEC’s concerns about a spot Ethereum ETF.
“Instead of holding 100% spot Ether, which could make it more susceptible to price manipulation in the spot market, the Fund will hold a mix of Spot Ether, Ether Futures Contracts, and cash,” the filing states.
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The filing adds that this diverse portfolio structure has certain investment limits. These rules include capping the amount of spot Ether the fund can hold to reduce the risk of manipulation.
It also explains that using spot and futures prevents the fund from getting too big in the spot market, which could lead to manipulation without affecting the futures market.
This is a developing story and more information will be added as it becomes available.
