Ether Futures ETF: A New Frontier for Crypto Investors in the U.S.
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The race for launching the first Ether futures exchange-traded fund (ETF) in the United States is heating up, as six major asset managers have filed fresh applications with the U.S. Securities and Exchange Commission (SEC) in the past week.
Ethereum race takes off following Volatility Shares' $ETHU filing last Friday, with 4 *futures-based* Ethereum ETF re-filings and one new filing, all effective Oct 16:
Bitwise Ethereum Strategy ETF
Roundhill Ether Strategy ETF
VanEck Ethereum Strategy ETF
ProShares Ether… pic.twitter.com/7jmQMr6PU7— ETF Hearsay by Henry Jim (@ETFhearsay) August 1, 2023
Ether futures ETFs are investment products that track the price of Ether futures contracts, which are agreements to buy or sell Ether at a predetermined price and date in the future. That said, Ether futures contracts are currently traded on the Chicago Mercantile Exchange (CME), the world’s largest derivatives marketplace.
Six Firms in the Run to Launch an Ether Futures ETF in the U.S.
The six firms that have submitted their applications are Grayscale, VanEck, BitWise, Volatility Shares, ProShares, and Round Hill Capital. Grayscale, the largest digital asset manager with over $40 billion in assets under management, has filed for two ETFs: one that invests in Ether futures contracts and another that invests in a composite of Bitcoin and Ether futures contracts.
VanEck, a leading provider of ETFs with about $80 billion in assets under management, has also filed for an Ether futures ETF that aims to match the performance of Ether with 100% exposure. BitWise, a pioneer in crypto index funds with over $1 billion in assets under management, has filed for an Ether futures ETF that tracks an index of Ether futures contracts with varying maturities.
Volatility Shares, a newcomer in the crypto space, has filed for an Ether futures ETF that invests in cash-settled Ether futures contracts, meaning that no physical delivery of Ether is required at expiration. ProShares, one of the largest providers of leveraged and inverse ETFs with over $60 billion in assets under management, has filed for a short Ether strategy ETF that profits from the decline of Ether futures prices. Round Hill Capital, a boutique investment firm focused on digital assets, has filed for an Ether futures ETF that invests in a basket of Ether futures contracts with different expirations.
All Eyes on the SEC
The SEC has not yet approved any crypto ETFs in the U.S., despite receiving dozens of applications over the years. The regulator has repeatedly expressed concerns over the volatility, liquidity, custody, and manipulation risks of the crypto market. However, some analysts believe that the SEC may be more receptive to Ether futures ETFs than Bitcoin ETFs, as Ether futures are regulated by the Commodity Futures Trading Commission (CFTC) and trade on a reputable exchange like the CME.
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