Discovery of Ethereum Futures ETF Registrations

Amidst the pending approval of the Bitcoin ETF Spot applications by the SEC, the market continues to witness new developments revolving around Ethereum ETF Futures.

Discovery of Ethereum Futures ETF Registrations

This morning (02/08), an asset manager at Bloomberg unexpectedly discovered a series of filings submitted to the SEC seeking to launch Ethereum ETFs in the form of futures.

As it stands, there are 6 major players joining the race, including Volatility Shares, Bitwise, Roundhill, VanEck, Proshares, and Grayscale. The community anticipates this number to increase, especially with the expectation of BlackRock, a giant previously approved by the SEC for 575 out of 576 ETF funds, potentially entering the fray.

Among them, Volatility Shares has fired the first shot in this new wave with their product named Ether Strategy ETF. According to their registration on July 28, the proposed ETF will track prices from Ethereum futures contracts instead of directly holding this cryptocurrency, and will be traded on the Chicago Mercantile Exchange (CME).

This move, although seemingly unexpected, was somewhat anticipated after the SEC gave the green light to Bitcoin Futures ETFs with 2x leverage, marking a first in the U.S. However, it is not ruled out that the SEC may return or request withdrawal of Ethereum ETF applications, as Ethereum also falls under securities regulations, as emphasized by SEC Chairman Gensler. In mid-May, the SEC requested Grayscale to withdraw their Filecoin Trust application, classifying FIL as a security.

In reality, the SEC has previously granted approvals for Bitcoin ETFs based on futures contracts, such as ProShares, Valkyrie, and VanEck products by late 2021. However, the commission remains cautious in approving similar products related to Bitcoin. Thus far, the SEC has not approved any Spot Bitcoin ETF proposals. SEC Chairman Gary Gensler maintains the view that derivatives markets have sufficient safeguards, contrasting with the risks of direct Bitcoin trading which are prone to fraud and manipulation.

Former SEC Chairman Jay Clayton argues that Bitcoin ETFs cannot be dismissed if they prove effective.

In summary, ETFs are indirect investment assets in cryptocurrencies in the form of fund certificates listed on traditional stock exchanges. Many are bullish on this development because it opens channels to inject capital from the financial market, paving the way for new growth momentum in the cryptocurrency sector, providing investors access to these assets without direct ownership.