Crypto investment specialist Hashdex has introduced the first bitcoin futures ETF in the US registered solely under the Securities Act of 1933.
The Hashdex Bitcoin Futures ETF (DEFI US) has been listed on NYSE Arca with an expense ratio of 0.94%.
The fund was developed in partnership with Teucrium Trading, a specialist in ’33 Act commodity funds, as well as Victory Capital Management, a global asset manager with $160 billion in assets under management.
The ETF tracks the Hashdex US Bitcoin Futures Fund Index which references the average prices of front-month and second-month bitcoin futures contracts trading on the Chicago Mercantile Exchange.
DEFI made its debut nearly one year after ProShares introduced the first US-listed bitcoin futures ETF in October 2021. The ProShares Bitcoin Strategy ETF (BITO US) received a warm welcome from investors, quickly growing its assets under management to more than $1 billion just days after it started trading. Following the spectacular fall in crypto asset prices in 2022, BITO currently houses around $600 million in assets.
BITO, as well as all subsequent bitcoin futures ETFs prior to DEFI, have been structured under the Investment Company Act of 1940.
DEFI’s registration under the ’33 Act is significant as it potentially indicates the US Securities and Exchange Commission has moved one step closer to authorizing the first directly backed spot bitcoin ETF which would likely also be approved under the ’33 Act.
Funds structured under the ’33 Act also contain different taxation rules compared to their ’40 Act counterparts, creating the potential for certain investors to obtain beneficial tax treatments through DEFI.
Additionally, ETFs structured under the ’40 Act are required to utilize an offshore subsidiary to obtain exposure to bitcoin futures. This offshore subsidiary can only account for a maximum of 25% of a fund’s assets, meaning that ’40 Act bitcoin futures ETFs are required to use leverage to obtain the desired degree of exposure. According to Hashdex, as DEFI is able to invest directly in bitcoin futures, it benefits from improved capital efficiency that will help the fund maintain a value that is closer in line with bitcoin.
Commenting on DEFI’s launch, Marcelo Sampaio, co-Founder and CEO of Hashdex, said: “The launch of the Hashdex Bitcoin Futures ETF showcases Hashdex’s ongoing commitment to delivering investors with innovative and regulated products and services that allow them to gain exposure to the digital asset class. This marks a significant milestone for our firm as we continue to introduce additional products and services – both in the US and globally – that help meet the specific needs of all types of individual and institutional investors.”
Bruno Sousa, Head of US at Hashdex, added: “At Hashdex, we have an unwavering dedication to consistently find innovative ways of building products that provide investors with options to gain crypto exposure – our latest product, DEFI, does just that by honouring bitcoin as what we believe is the foundation of the Decentralized Finance revolution. We are thrilled to join with best-in-class providers, Teucrium and Victory Capital, to introduce this first-of-its-kind investment vehicle.”