All HBARs acquired by the fund, if approved, will be held by a custodian.
The firm acknowledges that there is no guarantee that use of Hedera or HBAR will continue to grow.
Investment company Canary Capital has requested permission from the U.S. Securities and Exchange Commission (SEC) to issue and trade a hedera cryptocurrency exchange-traded fund (ETF) (HBAR), marking the first application of its kind.
As indicated in the documentation filed with the SEC, the fund’s goal will be to provide direct exposure to the value of HBAR, clarifying that “ownership of HBAR does not entitle its holders to any share of a company’s profits or any stream of income payments.”
“HBAR is a decentralized digital asset and its ownership is reflected in a decentralized ledger,” they indicated, and also clarified that all cryptocurrencies acquired They will be in the custody of an entity not yet revealed.
The company notes in the documents that the Hedera network allows people interact and transact online efficiently and securelyeliminating the need for intermediaries “who often collect and market personal data.”
“Its primary purpose is to facilitate a wide range of enterprise-grade decentralized applications. Although not specifically designed as a payments system or store of value, Hedera requires its native cryptocurrency, HBAR, to operate correctly,” they say. “HBAR not only protects the network against cyberattacks through its distributed consensus process, but also acts as the ‘fuel’ necessary to incentivize and pay for the computing resources that keep the network running,” the applicant company added.
Canary Capital also acknowledged in its filing that “there is no guarantee that usage of the Hedera Network or HBAR will continue to grow.” They add that “a contraction in the use or adoption of HBAR may result in an increase in volatility or a reduction in the price of HBAR, which could negatively affect the value of the shares.”
This is not the first time Canary Capital has explored the world of cryptocurrency ETFs. The company has also submitted applications to launch ETFs for other altcoins such as XRP and Litecoin, as CriptoNoticias has reported.
HBAR rises 30% after the announcement
The announcement of the application to launch a hedera ETF had an immediate impact on the market, with HBAR experiencing a 33% increase in price. For part of the day on Tuesday, HBAR’s value hovered around $0.05, before jumping to $0.07 and then correcting to close around $0.06.
With this rise, HBAR has recovered price levels last seen in July of this year, although it is still well below its all-time high of $0.50, reached in September 2021.
This boom in HBAR price comes amid widespread enthusiasm in the cryptocurrency ecosystem, fueled by Donald Trump’s recent election victory. Bitcoin, the most prominent digital currency, has also seen an increase, touching USD 90,000.
This article was created using artificial intelligence and edited by a human Editor.