Canary’s Hedera ETF deepens altcoin market access

Canary Capital’s spot Hedera exchange-traded fund has expanded regulated access to HBAR through Nasdaq, giving investors exposure to the cryptocurrency without requiring digital wallets, private keys or direct custody arrangements.

The Canary HBAR ETF, trading under the ticker HBR, is the first US-listed spot fund dedicated to Hedera’s native token. The product began operations on October 27, 2025, and started trading on Nasdaq the following day after its registration became effective. The launch followed a regulatory process that began well before the fund entered the market, correcting claims that the product was filed only yesterday.

HBR held net assets of about $48 million at the end of July 2026. The fund charges an annual sponsor fee of 0.95%, placing it above the fees charged by several large bitcoin and ether products. BitGo Trust Company and Coinbase Custody Trust Company safeguard the fund’s HBAR holdings, while US Bank National Association serves as cash custodian.

The fund is designed as a passive investment vehicle. It holds HBAR and seeks to reflect movements in the token’s dollar value, minus operating expenses and liabilities. Its net asset value is calculated using a benchmark based on aggregated trading activity across major HBAR markets. The structure allows investors to buy and sell shares through conventional brokerage accounts while avoiding the technical and security challenges associated with holding cryptocurrency directly.

The product’s performance has highlighted the volatility attached to single-token investment vehicles. HBR’s net asset value return was down 36.2% for the year through July 31 and had fallen 62.92% since inception. Its market-price return showed a similar decline, reflecting the sharp depreciation of HBAR after the fund’s launch. Shares traded at a discount of about 0.03% to net asset value at the end of July.

Demand continued despite those losses. Outstanding shares increased from 3.46 million at the end of 2025 to 4.2 million by March 31, with 740,000 shares created during the first quarter and none redeemed. The fund’s net assets remained near $50.3 million at the quarter’s close because new investment partly offset a decline in the value of its HBAR portfolio.

The trust reported a $10.58 million reduction in net assets from operations during the first quarter. That included more than $10.3 million in unrealised depreciation, about $126,500 in realised losses and a similar amount in sponsor fees. HBAR’s reference price fell from roughly 11 US cents at the end of December to nine cents at the end of March.

Canary Capital’s move formed part of a wider push by asset managers to broaden cryptocurrency ETFs beyond bitcoin and ether. Funds linked to Solana, Litecoin, XRP and other digital assets have tested demand for regulated products offering concentrated exposure to individual blockchain networks. Such vehicles may appeal to institutions barred from holding tokens directly, as well as retail investors seeking crypto exposure through familiar securities accounts.

Hedera differs from many public blockchain projects through its hashgraph consensus technology and governance structure. Its governing council includes international companies, universities and other organisations that participate in network oversight. The platform has been promoted for payments, tokenisation, supply-chain applications and high-volume enterprise transactions.

Supporters argue that an exchange-traded product could improve HBAR’s visibility, liquidity and integration with mainstream capital markets. They also point to the convenience of regulated custody, daily valuation and brokerage-based trading. The ETF structure may lower operational barriers for advisers and funds whose investment mandates restrict direct cryptocurrency ownership.

Risks remain substantial. HBR is concentrated entirely in one digital asset and does not provide the diversification associated with broad equity or bond funds. Investors face price volatility, regulatory uncertainty, market fragmentation, custody risks and the possibility that HBAR adoption will fall short of expectations. The fund does not use active management to limit losses during market declines.

The regulatory journey began when Nasdaq submitted a proposed rule change in February 2025 to list the trust as commodity-based shares. The application was amended in March, opened for public comment and subjected to additional scrutiny over market manipulation, investor protection and surveillance arrangements before the product reached the exchange.