Nasdaq has officially submitted its application for approval of the Hedera (HBAR) Exchange Traded Fund (ETF) to the U.S. Securities and Exchange Commission (SEC). The filing, led by Canary Capital, could open up opportunities for investors to indirectly invest in the Hedera network without purchasing HBAR directly from cryptocurrency exchanges.
Bloomberg ETF analyst Eric Balchunas noted, "HBAR and Litecoin (LTC) have emerged as the most likely altcoin ETF candidates for approval." Given its market capitalization ranking as the 21st largest cryptocurrency, the approval of this ETF is expected to have significant impacts on the market.
This filing follows Canary Capital's release of the HBAR trust last October and the subsequent submission of the S-1 registration statement for the first ETF the following November. Market analysts believe the 19b-4 submission could heighten the chances of ETF approval.
Reactions to the filing have already been swift, as HBAR's price jumped by 5% upon the news. This follows the trend observed last November, when the submission of the S-1 led to over 20% price increases. Such movements suggest investor optimism surrounding HBAR's potential as an institutional investment vehicle.
Canary Capital is not stopping at HBAR; they are also pursuing the approval of ETFs based on Litecoin and XRP. Bloomberg's analysis indicates Litecoin's strength stems from its lack of legal disputes with the SEC and classification as a 'commodity' by the Commodity Futures Trading Commission (CFTC), enhancing its approval likelihood.
Meanwhile, the ticker for the Litecoin ETF, known as 'LTCC,' has already been listed with the Depository Trust & Clearing Corporation, moving it closer to launch. Canary Capital is also reportedly exploring the approval of Solana (SOL) ETFs and is working on applications for XRP.
These initiatives represent key steps toward increasing institutional access to digital assets, potentially accelerating the sector's integration within the regulatory framework. While the SEC has not yet made any official decisions, should these ETF applications be approved, it could lead to ripple effects throughout the cryptocurrency ETF market.
Growing visibility for blockchain-based investment products is likely to stimulate continued market interest. Notably, the SEC currently reviews amendments to cryptocurrency ETF regulations, including options for staking and swapping with spot exchanges.
Since President Trump took office, the SEC's stance on cryptocurrency ETFs has shifted. Earlier this year, Franklin Templeton launched ETFs including spot Bitcoin (BTC) and Ethereum (ETH), following HedgeLex's listing of the Nasdaq Crypto Index ETF (NCIQ) last year. Bloomberg Intelligence speculates on the probabilities of approval for various ETFs, noting XRP's likelihood at 65%, with Litecoin and Solana at 90% and 70%, respectively.
Specific probability estimates for the HBAR ETF are still pending. Historically, the Biden administration's SEC initiated over 100 litigations against cryptocurrency firms, showcasing its strict regulatory approach. Nevertheless, with the recent approvals of Bitcoin and Ethereum ETFs, other cryptocurrency-based ETFs are gradually becoming viable candidates for regulatory evaluation.