Asset managers’ interests pivot to Ethereum futures ETFs Asset managers’ interests pivot to Ethereum futures ETFs
The applications are coming in less than two months after the financial regulator received a slew of spot Bitcoin (BTC) ETF applications from several traditional financial institutions, including BlackRock.
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Updated: Aug. 3, 2023 at 1:04 am UTC
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At least six asset managers, including Grayscale, have submitted an Ethereum (ETH) futures exchange-traded fund (ETF) filing application with the U.S. Securities and Exchange Commission (SEC).
The applications are coming in less than two months after the financial regulator received an avalanche of Spot Bitcoin (BTC) ETF applications from several traditional financial institutions, including BlackRock.
The Ethereum ETF applications
Volatility Shares triggered the wave of applications on July 28 with its submission. This was followed by other firms, including Bitwise, ProShares, VanEck, Roundhill, and Grayscale, which filed their applications on Aug. 1.
Most of the firms applied for a simple Futures derivatives ETF, while ProShares opted for an inverse/short ETF.
Proshares is focusing on daily contracts to make a profit off the losses of the S&P CME Ether Futures index. So any loss for the index would mean gains for ProShares Short Ether ETF and vice versa.
Meanwhile, Grayscale is applying for two ETFs: Grayscale Global Bitcoin Composite ETF and a Grayscale Ethereum Futures ETF. Grayscale already has an Ethereum Trust valued at over $3 billion, although it trades at a significant net asset value (NAV) discount.
Will the SEC approve an Ethereum ETF application?
Bloomberg financial expert James Seyffart questioned if the SEC would approve the wave of applications and predicted that the firms would likely withdraw their filings by the end of next week. Seffyart opined that the thinking at the firms might be:
“The cost of submitting a filing off the shelf and then withdrawing is miniscule when compared to the cost of being days or weeks behind a competitor on a first of its kind launch.”
The SEC could face pressure to approve ETH futures ETFs, considering the absence of a solid legal argument that would justify the approval of Bitcoin Futures ETFs while denying Ethereum Futures ETFs
The SEC has not approved any ETF applications that track Ethereum futures contracts. The regulator has also failed to provide regulatory clarity surrounding ETH, with chair Gary Gensler consistently declining to answer directly when asked if Ethereum is considered a security in the Commission’s view.
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Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Jacob Oliver is a recovering academic and English teacher turned crypto journalist and web3 writer. He holds a Ph.D. from the University of Washington.
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Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Bitcoin
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Grayscale Investments
Established in 2013 by Digital Currency Group, Grayscale Investments is a trusted authority on digital currency investing and cryptocurrency asset management.
VanEck
VanEck is a global investment manager with offices around the world, including New York, Australia, China, Germany, Netherlands and Switzerland.
BlackRock
BlackRock, synonymous with global asset management, is an American multinational investment management corporation based in New York City.