Canary Capital’s Historic Move for HBAR ETF
On November 12, 2024, Canary Capital took a significant step by applying to the U.S. Securities and Exchange Commission (SEC) for a spot exchange-traded fund (ETF) centered on Hedera (HBAR). This application marks the first proposal for a spot ETF specifically targeting HBAR, potentially setting a new standard for crypto ETFs beyond the mainstream options of Bitcoin and Ethereum.
Details of the HBAR ETF Proposal
The filing made by Canary Capital includes an S-1 registration statement that outlines the fund’s intention to provide investors direct exposure to HBAR, the native token of the Hedera network. Distinct from other crypto funds that often rely on derivatives or futures contracts, this ETF aims to hold HBAR tokens directly. This approach offers a more straightforward investment that reflects the actual value of Hedera. However, the filing currently lacks essential specifics, such as the identification of the fund’s custodian and administrator, leaving investors with several unanswered questions.
The Role of Hedera and HBAR
Hedera is governed by a consortium composed of various global organizations and enterprises that work together to create a secure and balanced ecosystem for users. HBAR plays multiple roles within this ecosystem, from facilitating decentralized applications (dApps) and transactions to supporting governance decisions. The multifaceted use of HBAR within the Hedera framework underscores its importance, not just as a digital asset, but as a critical component of the network’s functionality.
Canary Capital’s Established Background
Founded by Steven McClurg, who also established Valkyrie Funds, Canary Capital is no newcomer to the dynamic world of crypto ETFs. In October, the firm launched the HBAR ETF Trust aimed at accredited investors, and it has also pursued spot ETFs for other cryptocurrencies, such as Litecoin, Solana, and XRP. This track record highlights Canary’s commitment to innovating within the asset class.
Market Reactions to the HBAR ETF Filing
The announcement of the Canary Capital HBAR ETF has taken many market experts by surprise, particularly due to Hedera’s less prominent position among mainstream investors. Nonetheless, Hedera has been gaining traction, particularly following the introduction of its AI-integrated Prove system last October. The proposed ETF’s Net Asset Value (NAV) would be based on the price of HBAR in U.S. dollars, as calculated by Coindesk, aligning with Canary’s previous moves in the crypto ETF arena, such as its filing for a Litecoin ETF.
Impact on HBAR Prices and Future Outlook
Following the news of the HBAR ETF application, HBAR experienced a noteworthy rally, with its price increasing over 21% to reach $0.06764. The token saw an intraday high of $0.074, a significant jump from a previous low of $0.05317. This surge indicates a rekindled interest in HBAR among investors, coinciding with a general upswing in the broader cryptocurrency market.
The SEC’s Evolving Stance on Crypto ETFs
The landscape for spot crypto ETFs is shifting, particularly in light of the SEC’s recent approvals for Bitcoin and Ethereum spot ETFs. Despite prior hesitations expressed by SEC Chair Gary Gensler regarding cryptocurrency regulations, changes in political leadership, such as the possible election of President Donald Trump, could reshape the regulatory environment for crypto assets. Trump has indicated he might replace Gensler if he takes office again, and several high-profile figures are circulating as potential candidates for leadership in the SEC, adding another layer of anticipation to the market.