Hashdex has created a buzz by applying for a Bitcoin spot ETF with the U.S. Securities and Exchange Commission (SEC). The proposed Hashdex Bitcoin ETF plans to acquire its Bitcoin directly from exchanges that are associated with the Chicago Mercantile Exchange.
Experts like James Seyffart from Bloomberg have scrutinized the application, highlighting a strategy mainly focused on exchange-traded position transactions. This approach is unique in that it uses futures contracts to achieve spot market exposure, as opposed to buying Bitcoin outright on other exchanges.
The SEC’s decision to delay its comments until next year has contributed to significant anticipation and eagerness in the spot Bitcoin ETF space, as stakeholders keenly watch the unfolding developments.
The ongoing legal issues surrounding Grayscale continue as the U.S. Court of Appeals has once more delayed its decision on Grayscale’s attempt to convert its popular Bitcoin Trust into a conventional spot Bitcoin ETF. Craig Salm, Grayscale’s chief legal officer, announced this delay on August 22, mentioning that all legal cases involving Grayscale are still awaiting judgments.
Thus, the future of spot Bitcoin ETFs remains uncertain, along with other unresolved issues.
The initial attempt to create a Bitcoin ETF was by the Winklevoss Bitcoin Trust in 2013, which encountered roadblocks when the SEC dismissed their applications in 2017 and again in 2018 over concerns of market manipulation and fraud. Grayscale opted for an alternative route by initiating its Bitcoin Trust (GBTC) in the OTC market in 2017, thus avoiding the SEC’s extensive approval process.
ProShares and Bitwise also joined the race for a Bitcoin ETF in 2017 and 2019 but faced rejections in 2018 and 2019, respectively, due to issues related to market manipulation and investor safety. Realty Shares ETF Trust also planned a Bitcoin ETF in 2019 but scrapped the idea shortly after. WisdomTree’s 2022 Bitcoin ETF proposal was likewise turned down by the SEC due to concerns over public interest and vulnerability to fraud and manipulation.
Several other firms, such as BlackRock, ARK Investment Management, Bitwise, and VanEck, are also in the running for approval of a spot Bitcoin ETF. ARK, led by investor Cathie Wood, submitted a BTC ETF application in April and is said to be ahead of BlackRock in the line for approval.