Hashdex, a Brazilian asset manager, has filed an application with the US Securities and Exchange Commission (SEC) for a Bitcoin spot exchange-traded fund (ETF).
The company has changed the name of its previous ETF application with a DEFI ticker to Hashdex Bitcoin ETF and to hold spot Bitcoin. The DEFI application was submitted as a futures ETF.
However, Hashdex, unlike other Bitcoin futures ETFs, will not rely on the Coinbase SSA, a custody agreement that allows ETFs to store their BTC with the Coinbase Custody Trust Company.
Instead, Hashdex will use a mechanism called Exchange for Physical (EFP) offered by CME Group, the world’s largest futures exchange. EFP allows investors to exchange futures contracts with equivalent spot risk without having to buy or sell Bitcoin for cash directly from exchanges.
This new strategy could give Hashdex an advantage over other BTC ETF applicants as it could allay some of the SEC’s concerns about the liquidity and manipulation of the spot BTC market.
Using EFP, Hashdex can avoid dealing with unregulated or untrusted exchanges and instead rely on CME Group’s infrastructure and oversight.
*Not investment advice.