Recent Developments in Crypto ETFs

After detailing the growing number of crypto ETF proposals and developments in recent weeks, I wanted to point out the latest.

New Crypto Index ETFs

US crypto index ETFs— in their earliest forms—are now live. Franklin Templeton’s EZPZ ETF, named for the convenience of getting exposure to two crypto assets at once, holds both BTC and ETH. This ETF joined the Hashdex Nasdaq Crypto Index US ETF, which launched on Valentine’s Day.

The dual BTC-ETH exposure is expected to be just the first iteration of these products.

New Additions and Expectations

A Tuesday 19b-4 filing indicates that the Hashdex fund aims to add seven more digital assets: SOL, XRP, ADA, LINK, AVAX, LTC, and UNI.

Hashdex CIO Samir Kerbage did not comment specifically on filings, but he shared his expectations that both retail and professional investors would seek diversification, similar to traditional asset classes. He remarked, “Investors looking to make this type of allocation are also not necessarily interested in trying to individually research each and every asset. They want to know their allocation provides exposure to the major use cases and investment theses of crypto as they evolve.”

SEC and Proposed ETFs

The same day the 19b-4 was filed, the SEC continued acknowledging various proposed single-asset ETFs, signaling it is actively considering them. Recently, discussions centered around a potential litecoin ETF receiving approval emerged, stirring interest.

MAGA Seven Stocks

While many are aware of the Magnificent Seven stocks, Defiance ETFs introduced the MAGA Seven, labeling stocks it expects to benefit from Trump’s presidency. The specific companies included remain undisclosed, but speculations suggest COIN and MSTR may be part of this collection.

Modifications to Existing ETFs

Modifications to existing bitcoin and ether ETFs are also underway. For example, Grayscale and 21Shares filed late last week to initiate staking for their ether ETFs. Nasdaq and Cboe recently filed to allow in-kind creations/redemptions for BlackRock’s bitcoin ETF and VanEck funds, respectively. As noted by Hester Peirce, progress on custody and other issues will need to occur before these changes can come into operation.