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BTC ETFs aside –  6 firms file SEC applications for Ether futures ETFs

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TL;DR Breakdown

  • Bitcoin ETFs have birthed a new trend as Volatility Shares, Bitwise, VanEck, Roundhill, ProShares, and Grayscale file applications with the SEC for Ether ETFs.
  • According to reports, the first ether futures ETF could go live on Oct. 12, 2023, if the SEC does not deny the application.
  • Grayscale has 2 ETF applications, and its Ether ETF, if approved, will be traded on the Chicago Mercantile Exchange.

Description

According to reports, there are currently six Ethereum Futures ETFs awaiting approval from the SEC. Several weeks after the bitcoin spot ETF craze, these entities have filed applications with the U.S. Securities and Exchange Commission (SEC) for ether (ETH) futures-based exchange-traded funds (ETFs). How will this pan out? The race for Ether features begins The … Read more

According to reports, there are currently six Ethereum Futures ETFs awaiting approval from the SEC. Several weeks after the bitcoin spot ETF craze, these entities have filed applications with the U.S. Securities and Exchange Commission (SEC) for ether (ETH) futures-based exchange-traded funds (ETFs). How will this pan out?

The race for Ether features begins

The crypto market’s interest in crypto-related ETFs was sparked by a rush of applications for spot-bitcoin ETFs, particularly after BlackRock first filed on June 15 and then refiled in early July with Coinbase as a surveillance-sharing partner.

According to market analysts, Ethereum futures ETFs may be appealing to financial firms since they could offer exposure to emerging markets. Volatility Shares Ether Strategy ETF was the first to file on July 28. 

Volatility Shares made headlines in June when their 2x Bitcoin Strategy ETF (BITX) became the first leveraged crypto ETF available in the United States.

Volatility’s filing also mentions that it plans to buy cash-settled Ether Futures Contracts. In cash-settled futures markets, if the price of a futures contract rises, the counterparty pays the buyer, and if the price of the futures contract falls, the buyer pays the counterparty.

Within 24 hours of filing on August 1, Bitwise Ethereum Strategy ETF, VanEck Ethereum Strategy ETF, Roundhill Ether Strategy ETF, ProShares Short Ether Strategy ETF, and Grayscale Ethereum Futures ETF had all filed.

Historically, the SEC has never approved any ETF applications tracking Ethereum futures contracts, despite the fact that nearly ten applications have been submitted. If the SEC does not reject the applications, the Ether ETFs will debut 75 days after the filing date, with Volatility Shares being the first to launch on October 12, followed by the others.

For BTC ETFs, ARK 21Shares Bitcoin ETF is first in line, followed by BlackRock’s iShares Bitcoin Trust, Bitwise’s Bitcoin ETP Trust, Fidelity’s Wise Origin Bitcoin Trust, WisdomTree Bitcoin Trust, VanEck Bitcoin Strategy ETF, Invesco Galaxy Bitcoin ETF, and Valkyrie’s spot-bitcoin ETF.

Details about the ETFs filings

The filing by Grayscale contains two applications: a Grayscale Global Bitcoin Composite ETF and a Grayscale Ethereum Futures ETF. The Ether ETF offered by Grayscale will invest in futures contracts that will be traded on the Chicago Mercantile Exchange.

The SEC filing indicates that Grayscale’s fund will invest predominantly in “front-month” Ether futures, which have “the shortest time to maturity.” Grayscale added that it intends to “roll” expiring Ether Futures contracts.

According to VanEck’s filing, its investment strategy will seek to invest in ETH Futures contracts so that the value of ETH to which the fund has exposure equals 100% of the fund’s total assets.

According to the filing, any changes in the value of ETH will cause bigger adjustments to VanEck’s Ether ETF fund. This would imply “greater losses than if the Fund’s exposure to the value of ETH were unleveraged.”

ProShares provided an explanation of their Short Ether Strategy ETF, which will invest in daily contracts to profit from the S&P CME Ether Futures index’s losses. As previously stated, the ProShares fund would earn as much as the index loses on any given day and vice versa.

BTC ETFs aside –  6 firms file SEC applications for Ether futures ETFsBTC ETFs aside –  6 firms file SEC applications for Ether futures ETFs

According to a Bloomberg analyst, the ETF could unlock $30 trillion in capital. This might happen if the SEC approves these filings. The fact that such well-established companies have filed for an ETF suggests that approval could be forthcoming.

Concerns regarding ether futures liquidity levels and a lack of clarity as to whether ether is a security or a commodity were cited by industry participants as potential causes. Fund titans BlackRock, Fidelity, and others have recently filed for a spot bitcoin ETF with the Securities and Exchange Commission. 

According to Binance, the live price of Ethereum is $ 1,858.05 per (ETH / USD), with a current market cap of $223.29B. 24-hour trading volume is $6.98B. Ethereum is +1.45% in the last 24 hours with a circulating supply of 120.17M. ETH markets are green to show confidence.

BTC ETFs aside –  6 firms file SEC applications for Ether futures ETFsBTC ETFs aside –  6 firms file SEC applications for Ether futures ETFs
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