Canary Capital, a crypto investment firm, has made a significant move by proposing a Hedera HBAR spot exchange-traded fund (ETF) to the SEC. This would be the first ETF of its kind. If the SEC approves it, institutional investors will gain direct access to the HBAR token. Following this announcement, HBAR's value jumped over 24% in just an hour, hitting a four-month high.

In the SEC filing, Canary Capital stated that the ETF will directly hold HBAR. They plan to avoid using derivatives, futures, or other financial instruments. Instead of receiving HBAR, shareholders will get cash proceeds. This makes transactions simpler. However, the filing doesn’t mention who will act as the custodian or administrator for the fund.

This proposal comes on the heels of Canary Capital launching an HBAR Trust for accredited investors back in October. The firm is led by Steven McClurg, who has a history of filing for spot ETFs related to Litecoin, Solana, and XRP. McClurg also founded Valkyrie Funds, which manages other spot crypto ETFs.

The filing includes specific scenarios that could lead to the Trust being terminated. For example, if the ETF’s shares are delisted and not relisted within five days, or if regulators classify the Trust as an investment company or commodity pool, operations will stop.

The SEC's position on crypto ETFs is still unclear. Earlier this year, they approved 11 Bitcoin ETFs and eight Ethereum ETFs, but future approvals remain uncertain. This regulatory ambiguity comes at a time when there’s speculation about SEC Chair Gary Gensler potentially leaving his post, especially with Trump returning to the presidency. Trump has indicated he would replace Gensler if elected.

Since the 2024 US election, crypto ETFs have seen a surge in activity. Bitcoin ETFs recorded over $7.22 billion in trading volume, while Ethereum ETFs attracted $295 million in inflows, thanks in large part to investment from BlackRock and Fidelity.

Recently, BlackRock’s Bitcoin ETF (IBIT) surpassed its Gold ETF in size. This is notable, especially as Bitcoin reached an all-time high. It reinforces Bitcoin’s reputation as “digital gold,” particularly since gold itself is trading at its highest level since 1980.