SEC Approves the First Cryptocurrency Index ETF in the U.S.
The U.S. Securities and Exchange Commission (SEC) has approved applications from Nasdaq and Cboe BZX Exchange, allowing Hashdex and Franklin Templeton to list and trade cryptocurrency index exchange-traded funds (ETFs). This development is seen as a significant step in the crypto world.
The Hashdex Nasdaq Crypto Index US ETF and Franklin Crypto Index ETF will initially invest based on the spot market values of Bitcoin and Ethereum in an 80/20 ratio. According to Bloomberg ETF analyst Eric Balchunas, these ETFs are expected to launch in January. The approval of these crypto index ETFs marks a major milestone in U.S. markets.
The crypto ETF market continues to expand. The SEC's approval decision made on Thursday is noteworthy due to its strong similarities with the previously approved spot Bitcoin and Ethereum ETFs. Hashdex and Franklin Templeton’s ETFs have made history as the first crypto index ETFs approved in the U.S. Hashdex submitted its initial application for this ETF in June and received approval following modifications made in November. Hashdex is considering adding other cryptocurrencies such as AVAX, LINK, and LTC to its fund in the future.
Similarly, Franklin Templeton filed an S-1 application in August. The SEC expedited the approval of Franklin Templeton's application, indicating that the fund may include more cryptocurrencies in the future. These new ETFs are viewed as an important step toward the diversification and mainstreaming of the crypto market.
Despite historic ETF approvals, the market decline continues. The SEC’s approvals are interpreted as a sign of increasing acceptance of cryptocurrencies in mainstream finance. However, Bitcoin and Ethereum prices continue to decline despite the ETF approvals. In today's trading, Bitcoin experienced a 4% drop, while Ethereum's price fell by as much as 9%.
According to data, U.S. spot Bitcoin ETFs recorded a net outflow of $680 million on December 19, marking a historic record. Spot Ethereum ETFs similarly saw a net outflow of $60 million. The decline in cryptocurrency values continues to create uncertainty among investors. Nevertheless, these expansions in the cryptocurrency space are expected to have significant impacts on the market's future direction.
Further ETF approvals for cryptocurrencies are anticipated in the future. Speculations suggest that other cryptocurrencies such as Solana and XRP may be approved as ETFs in the upcoming period. Bloomberg ETF analyst James Seyffart proposed that cryptocurrencies like Litecoin and Hedera could be approved as ETFs before Solana and XRP.
These developments could signal potential changes in the SEC's cryptocurrency policies. Investors and market analysts continue to closely monitor the SEC's policies and the market's reactions.