- HBAR operates on Hedera, supporting decentralized applications; ETF holdings to be kept by an undisclosed custodial entity.
- Hedera’s HBAR required for network operations, acting as ‘fuel’ for transactions and protecting against cyberattacks.
Canary Capital, an investment company, has officially filed with the U.S. Securities and Exchange Commission (SEC) to launch an exchange-traded fund (ETF) for the cryptocurrency Hedera (HBAR). This marks the first such filing for an HBAR-focused ETF, positioning Canary Capital as a pioneer in this area of crypto asset investment.
Details of the Proposed HBAR ETF
The primary objective of the ETF, as stated in the SEC filing, is to offer investors direct exposure to the value of HBAR. The documentation clarifies that holding HBAR does not entitle the holder to any corporate profits or revenue payment streams.
“HBAR is a decentralized digital asset, recorded on a decentralized ledger” the filing noted, adding that all acquired cryptocurrencies will be held under the custody of an undisclosed entity.
Operational Uses and Benefits of Hedera Network
The documents further elaborate on the functionality of the Hedera network, which facilitates efficient and secure online interactions and transactions, bypassing intermediaries who typically collect and market personal data.
“The primary purpose of Hedera is to support a wide range of decentralized enterprise-level applications. Although not specifically designed as a payment system or a store of value, Hedera requires its native cryptocurrency, HBAR, to function optimally,” the company stated.
HBAR not only protects the network from cyberattacks through its distributed consensus process but also serves as the necessary ‘fuel’ for computing resources that keep the network operational.
Risks and Market Implications
Canary Capital acknowledged in its filing the uncertainty of continued growth in the use of Hedera or HBAR.
“A contraction in the usage or adoption of HBAR could lead to increased volatility or a reduction in the price of HBAR, which could adversely affect the value of the shares,” the company cautioned.
This is not Canary Capital’s first foray into cryptocurrency ETFs. The firm has also filed applications to launch ETFs for other altcoins such as XRP and Litecoin, as reported by CriptoNoticias.
Following the announcement of the ETF application, HBAR’s price saw an immediate surge, increasing by 33% on Tuesday.
The price of HBAR fluctuated around $0.05 before jumping to $0.07 and then settling around $0.06 by the close of trading. This price increase brought HBAR to levels last seen in July of this year, though it remains well below its all-time high of $0.50 reached in September 2021.
The current price of Hedera (HBAR) is $0.05926 USD, experiencing a sharp decline of 8.82% today.
Key Observations:
Price Trend: Despite the significant drop today, HBAR has shown a strong recovery over the past week with a 27.47% increase. However, it is still down 47.23% over the past six months, highlighting ongoing bearish pressure in the longer term.
Market Capitalization: HBAR’s current market cap stands at $2.23 billion USD, with a trading volume of $673.41 million USD in the past 24 hours. The volume-to-market cap ratio of 0.1049 suggests active trading but also indicates potential selling pressure amid today’s decline.
Technical Analysis
HBAR is currently testing support around the $0.059 USD level. A failure to hold this level could push the price down towards the next support zone at $0.050 USD. On the bullish side, a rebound could see the price targeting $0.070 USD, aligning with recent bullish patterns like the Cup & Handle formation seen on longer time frames.
