TL;DR
- The SEC approves the first hybrid ETFs combining Bitcoin and Ethereum, a significant step towards integrating cryptocurrencies with traditional markets.
- The funds, Hashdex Nasdaq Crypto Index US and Franklin Crypto Index, will have an approximate distribution of 80% Bitcoin and 20% Ethereum.
- The launch of these products is scheduled for January, and they are expected to meet the demand for diversification in the cryptocurrency market.
The U.S. Securities and Exchange Commission (SEC) has greenlighted the creation of the first hybrid exchange-traded funds (ETFs) combining Bitcoin and Ethereum.
The approval comes after several months of reviews and extensions, marking a milestone in the integration of cryptocurrencies with traditional financial markets. The SEC has approved the inclusion of the Hashdex Nasdaq Crypto Index US ETF on Nasdaq and the Franklin Crypto Index ETF on the Cboe BZX Exchange, two products that will allow investors to gain exposure to both cryptocurrencies in a single instrument.
Both funds will follow an approximate distribution of 80% Bitcoin and 20% Ethereum, based on the floating market capitalization of both cryptocurrencies. The approval of these funds is a result of a trend toward greater product diversification within the market. The SEC emphasized the importance of the “surveillance-sharing” agreement between exchanges, a measure designed to enhance the detection of fraud and manipulation in connected markets.
Hybrid ETFs Set to Launch Next Month
The launch of these products is scheduled for January, and it is expected that the offering will attract a wide base of investors seeking diversified exposure. Industry analysts believe that hybrid funds are a response to the demand for products that offer access to the two most significant assets in the crypto market. Nate Geraci, president of ETF Store, pointed out that these products will be well-received due to their ability to provide a much-desired alternative since crypto ETFs first appeared in the traditional market.
Furthermore, the approval of these new funds also demonstrates the SEC’s recognition that hybrid products can meet the regulatory requirements established for commodity-based funds.
Interest in cryptocurrency ETFs is steadily rising. Funds like BlackRock’s IBIT, which dominates the market with $56 billion in assets under management, are revolutionizing the industry. Despite declines in investment flows observed in other products, the arrival of these hybrid funds is expected to further boost access to and acceptance of cryptocurrencies in traditional financial markets
