Posted: November 13, 2024

• Canary files for the first HBAR crypto ETF.
• Industry experts foresee more incoming applications amidst regulatory shifts.

Canary Capital just made the first move to file for a Hedera [HBAR] exchange-traded fund [ETF]. On 12th November, the investment firm submitted an S-1 form with the U.S. Securities and Exchange Commission (SEC), signaling its ambition to provide direct exposure to HBAR through an ETF.

The filing rules out using HBAR-linked derivatives or futures contracts, keeping the asset outside the US Commodity Futures Trading Commission’s [CFTC] watch.  As of now, the firm has not disclosed an exchange, custodian, or ticker symbol for the proposed ETF.

Interestingly, this move follows Canary’s October launch of the HBAR Trust—the first dedicated HBAR investment vehicle in the U.S. The private offering provides qualified investors with secure exposure to HBAR.

Worth noting, that this marks Canary’s 4th ETF filing. Previous applications have focused on other popular digital assets, including Ripple [XRP], Solana [SOL], and Litecoin [LTC].

HBAR ETF sparks debate in the crypto community 

While unexpected, the filing has prompted interesting reactions from industry experts. Many see it as a timely response to shifting regulatory expectations in the wake of Donald Trump’s recent election victory.

In the latest post on X, Bloomberg’s senior ETF analyst, Eric Balchunas, likened it to 

“The post-Trump spaghetti cannon in effect..” 

The analyst hinted at a potential wave of ETF proposals to come, adding, 

”Doge ETF incoming in 3.. 2.. 1..”

Adding to the discussion, Nate Geraci, ETF Store President, in a message to The Block, suggested that this filing is an early signal of how significantly some ETF issuers anticipate shifts in crypto regulatory dynamics. The exec remarked, 

“My expectation is that issuers will grow increasingly aggressive with crypto-related ETF filings in an attempt to test out the SEC under the new Trump administration.”

Price reacts

Following the filing, HBAR saw a positive uptick. At press time, it was trading at $0.058, up 3.57% in the past day.

Furthermore, it rallied by double-digits over the past week, marking gains of over 19%. The price rise elevated the market cap to $2.20 billion, a 3.04% increase.

Trading activity surged massively as the 24-hour trading volume rose by 280%, registering at $689.34 million. As per CoinMarketCap, HBAR ranked as the 45th largest crypto asset. 

HBAR ETF approval prospects 

Notably, the approval of a spot ETF tied to HBAR remains uncertain. While recent Bitcoin [BTC] and Ethereum [ETH] ETF approvals show progress, further crypto assets are not guaranteed approval. 

However,  Trump’s victory has set the industry on a new pedestal. With the likely removal of Gary Gensler as SEC Chair, many analysts believe there is hope for crypto ETFs.

Thus, Canary Capital’s HBAR ETF filing reflects rising demand for a diverse range of crypto-backed ETFs. If approved, it may set a precedent, encouraging broader acceptance of alternative crypto assets in U.S. financial markets.