Hashdex introduces first ’33 Act bitcoin futures ETF | ETF Strategy

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Cryp­to invest­ment spe­cial­ist Hashdex has intro­duced the first bit­coin futures ETF in the US reg­is­tered sole­ly under the Secu­ri­ties Act of 1933.

Hashdex introduces first ’33 Act bitcoin futures ETF

DEFI is the first US-list­ed bit­coin futures ETF reg­is­tered 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.”

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