Asset manager Hashdex is planning to integrate XRP and ADA into its crypto index ETF, a product that originally comprised Bitcoin and Ethereum.
After holding just Bitcoin (BTC) and Ethereum (ETH), the newly launched Hashdex index ETF plans to expand to seven more digital assets. It is proposing to add Solana (SOL), Cardano (ADA), Avalanche (AVAX), XRP, Litecoin (LTC), Uniswap (UNI), and Chainlink (LINK) to the crypto ETF index.
Eligibility Criteria For Hashdex Crypto Index ETF
In a March 17 filing with the United States Securities and Exchange Commission (SEC), Brazil-based asset manager Hashdex amended its S-1 regulatory filing to accommodate the listed altcoins. Before now, BTC’s weighting in the index ETF was capped at 88.3%, while ETH was at 11.7%.
Should the proposed change be approved, these cryptocurrencies must share their weightings with the other assets. However, the new tokens’ weightings will be based on their free float market capitalization. Noteworthy, the decision to add these digital assets is not spontaneously decided. Rather, it is a product of careful consideration and review of reputational and security concerns.
Whatever token makes it to the index is expected to meet certain eligibility requirements, including having tradable markets listed on core exchanges like Gemini, Bitstamp, and Coinbase, amongst others. Also, the token must have free-floating pricing so that its value is not pegged to any other asset.
Once a crypto asset is discovered to facilitate novel use cases or lacks crypto-economic innovation, it is not considered for the index ETF. The proposed additions to altcoins “are decentralized peer-to-peer computer systems that rely on public key cryptography for security, and their values are primarily influenced by market supply and demand.”
ETF Issuers Push For More Crypto Funds
This recent development reflects the growing interest amongst ETF issuers to roll out more of these funds, hinged on the clearer crypto regulation ushered in by Donald Trump’s administration. In the last few months, Canary Capital, Bitwise, WisdomTree, and many other asset managers have filed for several crypto ETFs.
A few weeks ago, 21Shares submitted an S-1 registration statement to the US SEC to list spot Polkadot (DOT) ETF. The fund intends to focus on exclusively tracking the CME CF Polkadot-Dollar Reference Rate price of DOT without any derivative or leverage components. Shortly after, Bitwise submitted separate filings for a Dogecoin ETF and a spot Aptos ETF.
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