XRP News Today: SEC Decision in July May Expand Crypto ETF Assets by 50%

One of the upcoming decisions by the Securities and Exchange Commission (SEC) on crypto ETFs could mark a significant milestone for investors aiming to diversify their exposure within the crypto segment. Samir Kerbage, the Chief Investment Officer of Hashdex, highlighted the anticipated SEC decision in July, which could permit crypto index products to expand the range of assets they hold.

The Hashdex Nasdaq Crypto Index US ETF (NCIQ), launched in February, currently holds both Bitcoin (BTC) and Ethereum (ETH). Kerbage noted that the holdings in this ETF are designed to adapt as the market evolves, particularly in response to regulatory developments. In March, the Brazil-based firm sought approval for NCIQ to invest in additional assets, including Solana (SOL), XRP, Cardano (ADA), Chainlink (LINK), Avalanche (AVA), Litecoin (LTC), and Uniswap (UNI).

Kerbage previously expressed Hashdex's ambition to create "the Nasdaq 100 for crypto," indicating a broader vision for the firm's crypto index products. Grayscale, another major player in the crypto space, filed in November to uplist its Digital Large Cap Fund, which holds BTC, ETH, SOL, XRP, and AVA, to an ETF. The SEC's final deadline to rule on this proposal is July 2, and clarity on this specific offering could extend to products by Hashdex, Bitwise, and others.

Scott Johnsson, a general partner at Van Buren Capital, is closely monitoring this date. He suggested that because index products have more undefined allocations, the SEC could adopt a general rule rather than case-by-case rules for proposed single-asset crypto ETPs. Johnsson emphasized that the SEC's approach to the security question for non-BTC/ETH allocations will be closely watched.

Kerbage expects the SEC to allow US products to hold assets beyond BTC and ETH before approving more single-asset crypto ETFs. He noted that if the SEC is not comfortable with a specific single asset as an ETP, they might still allow an index to have a small allocation to that specific asset. This perspective underscores the potential for broader regulatory acceptance of diversified crypto index products.

Kerbage shared insights from a meeting with the SEC, where Hashdex discussed their experience with crypto ETPs outside the US and suggested that the SEC could set up a listing standard to provide more predictability. He believes the SEC has the necessary information to make decisions without changing legislation, although other aspects like broker-dealer rules and market structure remain complex. Clarity on the ETF side, however, is within the SEC's current mandate.

Kerbage views the demand for crypto index ETFs as higher than for single-asset crypto products, especially for traditional investors who find it too risky to pick individual winners. He compared this to the approach in other asset classes, where investors often opt for index funds rather than individual stocks. This diversified approach is seen as more suitable for a small allocation in a portfolio, making it easier for advisers and financial professionals to manage.

Hashdex also offers a US ETF that invests solely in Bitcoin, but Kerbage noted that 90% of their conversations with investors are around index products. He emphasized that investing only in Bitcoin means shorting the broader crypto market, and the biggest opportunity lies in gaining exposure to the entire crypto space, not just Bitcoin. This perspective highlights the growing interest in diversified crypto investments.

Kerbage also discussed the impact of the latest vote against the stablecoin-focused GENIUS Act on broader crypto regulatory progress. He noted that while the executive branch is pushing for clarity in the industry, discussions in Congress and potential controversies could affect the timeline. However, the SEC chairman's public statements indicate that providing clarity to the crypto industry is a priority for the administration.