“The United States Securities and Exchange Commission (SEC) has recently been flooded with applications for Ether-based futures exchange-traded funds (ETFs): a total of 11 Ether-based ETF applications were submitted in less than a week.”[1]
Ether, the second-largest cryptocurrency by market capitalization, has gained prominence in the cryptocurrency ecosystem. With the increasing growth and adoption of Ether, a new trend has emerged, catching the attention of investors and financial market enthusiasts: the surge of applications for Ether ETFs inundating the SEC.
These Ether ETF applications aim to open new investment opportunities and provide traditional investors access to the leading cryptocurrency in the market.
The eleventh Ether ETF application came from ProShares, proposing an ETF that equally tracks the performance of Bitcoin and Ether. “According to the filing, the fund will follow the performance of holding long positions in monthly bitcoin and Ether futures contracts nearest to expiration.”[2]
On July 28th, Volatility Shares submitted its application for the Volatility Shares Ether Strategy ETF, triggering a wave of Ether-based ETF applications. Following this request, participants like Bitwise Asset Management, Roundhill Financial, Van Eck, ProShares, and Grayscale Investments submitted new Ether futures applications on August 1st.
However, both Grayscale and Bitwise withdrew their filings in response to the SEC’s statements. Furthermore, “the SEC had previously asked Grayscale to withdraw its Filecoin Trust application, arguing that it could be considered a security.” [3]
Despite the growing interest and demand for Ether ETFs, the SEC has been cautious in its approach to approving such financial products. As a result, the SEC has never authorized an ETF based on Ether futures contracts. However, bitcoin ETF futures have existed since 2021.
The wave in Ether-focused applications comes after a flurry of applications from major asset managers planning to launch bitcoin cash-settled ETFs. However, the SEC “has argued that the market lacks investor protection and is subject to market manipulation, meaning it cannot approve a cash-settled ETF”. [4]
It is important to note that “The main difference between futures ETFs and cash-settled ETFs is that the former tracks the price of futures contracts, while the latter involves the purchase of the underlying asset by the issuer. Cash-settled ETFs are generally considered more valid as they involve the purchase and holding of the underlying asset by the fund manager.”[5]
The increase in Ether ETF applications flooding the SEC highlights the growing interest and confidence in the potential of Ethereum and cryptocurrencies in general. However, the future of Ether ETFs remains uncertain, but their increasing popularity suggests that investors are eager to access this growing asset class and participate in the exciting world of cryptocurrencies.
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[1]https://es.cointelegraph.com/news/proshares-files-ether-futures-etf-application-sec?utm_source=Telegram&utm_medium=social
[2]https://es.cointelegraph.com/news/proshares-files-ether-futures-etf-application-sec?utm_source=Telegram&utm_medium=social
[3]https://cryptocity.press/noticias/crece-interes-por-los-etf-de-futuros-de-ethereum-se-suman-proshares-y-grayscale
[4]https://cryptocity.press/noticias/crece-interes-por-los-etf-de-futuros-de-ethereum-se-suman-proshares-y-grayscale
[5]https://es.cointelegraph.com/news/proshares-files-ether-futures-etf-application-sec?utm_source=Telegram&utm_medium=social
