The pursuit of unveiling more cryptocurrency exchange-traded funds (ETFs) is progressing, with a recent application submitted to the US Securities and Exchange Commission (SEC) by Nasdaq for the Canary HBAR ETF. This ETF is designed to be anchored by the native token of the Hedera Network, HBAR.
This move represents another addition to a growing roster of filings from various issuers and exchanges aiming to launch altcoin-focused ETFs. Trading for these ETFs can only commence once the SEC completes its assessment and grants approval for the filing.
The asset management firm behind this proposed ETF originally sought SEC approval back in November. The primary goal of the fund is to offer investors a means of gaining exposure to HBAR, which serves as the foundational token for the Hedera hashgraph-based distributed ledger technology.
Besides the HBAR-focused ETF, there have been requests for ETFs linked to multiple other cryptocurrencies. This includes interest in altcoins such as Polkadot and a few lesser-known tokens. Managers in the asset management space are eagerly waiting for the necessary regulatory backing for additional variations, such as allowing staking options or in-kind redemption features for existing ETF products.
As the interest in cryptocurrency ETFs amplifies, Nasdaq’s filing aligns with a broader trend of increasing submissions targeting cryptocurrency-related investments. Notably, two crypto index ETFs have already been launched this month, with Franklin Templeton recently introducing a fund that holds both Bitcoin and Ether. This comes after the February debut of Hashdex’s Nasdaq Crypto Index US ETF.
Anticipations for regulatory approvals are optimistic among analysts, particularly regarding NFTs like XRP, Litecoin, and Solana. For XRP, Bloomberg Intelligence estimates a 65% chance of approval, with Litecoin and Solana seen at 90% and 70% respectively. However, the likelihood of approval for the HBAR ETF remains uncertain since no predictions have been provided by Bloomberg.
A significant shift in the SEC’s attitude towards cryptocurrency has been noted, especially after the presidency transition. The regulatory environment, previously viewed as rigid, began to evolve, resulting in a couple of successful ETF launches this month. Under the previous administration, the SEC had taken a more adversarial approach, marked by numerous legal actions against cryptocurrency companies under securities law violations. Nonetheless, by 2024, the SEC permitted spot Bitcoin ETFs while rejecting proposals for those linked to alternative digital assets.
The filing for the HBAR ETF and the mounting interest in diverse altcoin ETFs signifies that the SEC is under growing pressure to further broaden the investment landscape for cryptocurrencies. If the current trend of approvals persists, there is a strong possibility that investors will soon have access to a wider range of regulated financial products that provide exposure to various digital assets.
This ongoing development reflects an evolving context in the cryptocurrency investment space, where market participants are looking at new avenues for engagement amid a transformative regulatory landscape.