The Securities and Exchange Commission (SEC) has approved the first hybrid Bitcoin-Ethereum exchange-traded funds (ETFs) on December 19, 2024. This groundbreaking decision paves the way for two new funds that combine both cryptocurrencies: Hashdex’s Nasdaq Crypto Index US ETF and Franklin Templeton’s Crypto Index ETF.
Senior Bloomberg ETF analyst Eric Balchunas commented on the approval, stating, “They’re market cap weight so 80/20 BTC/ETH approx. Notable that Hashdex & Frankie are first. Good for them.” The spot bitcoin/ether combo ETFs have been given the green light by the SEC, with a likely launch date in January.
The regulatory framework and security measures for these hybrid Bitcoin-Ethereum ETFs have been carefully considered by the SEC. The proportion of bitcoin and ether held by each Trust will be based on free-float market capitalizations. These cryptocurrency ETFs must be transparent about their holdings and prices, updating their values every 15 seconds during trading.
In the Bitcoin ETF space, BlackRock’s IBIT leads with $56 billion, followed by Fidelity’s FBTC and Grayscale’s GBTC managing $20 billion each. Recent data shows that investors pulled $671 million from major funds on December 19. On the other hand, the Ethereum ETF sector continues to attract significant investments.
Experts anticipate a high demand for these hybrid cryptocurrency ETFs, as they offer diversification in an emerging asset class like crypto. Nate Geraci, president of the ETF Store, predicts meaningful demand for these products, especially among advisors who value diversification.
The approval of these hybrid Bitcoin-Ethereum ETFs marks a significant milestone in the crypto investing landscape. When these ETFs launch in January, investors will have the opportunity to invest in both major cryptocurrencies simultaneously. This development comes as big financial firms enter the crypto market and regulatory guidelines become clearer.
Overall, the approval of the hybrid Bitcoin-Ethereum ETFs by the SEC signals a growing acceptance of cryptocurrencies in the traditional financial sector. As these ETFs enter the market, they are expected to attract a wide range of investors looking to diversify their portfolios with exposure to both Bitcoin and Ethereum.