U.S. Securities and Exchange Commission (SEC) is reportedly gearing up to approve several exchange-traded funds (ETFs) tracking Ethereum futures concurrently. This move signifies a potential shift in the regulatory stance towards digital asset-based ETFs.
Asset management firm Volatility Shares has announced plans to debut its ETF, which tracks futures linked to Ethereum, on October 12. This could potentially mark it as the inaugural Ethereum futures ETF in the U.S. In a parallel development, Valkyrie, another prominent asset management entity, is eyeing an early October launch for its BTC-Ethereum ETF.
The SEC has witnessed a deluge of applications since July, with over 16 ETF proposals, either solely for Ethereum or combined with Bitcoin, currently in the regulatory pipeline. Contrasting its 2021 approach, where the SEC directed firms to retract similar applications, the regulatory body has refrained from issuing such directives this year. This change hints at a more accommodating regulatory environment for such ETFs.
Distinct from direct cryptocurrency investments, a crypto futures ETF channels its investments into futures contracts pegged to the prices of digital assets like Bitcoin or Ethereum. The ETF sector underscores the importance of the first-mover advantage. To illustrate, ProShares’ Bitcoin futures ETF, launched in October 2021, amassed over $1 billion in assets under management, while Valkyrie’s analogous product, introduced shortly after, garnered close to $28 million.
Major financial institutions, including Fidelity and BlackRock, are eagerly awaiting the SEC’s decision on the approval of a spot Bitcoin ETF. Echoing the sentiment around concurrent Ethereum futures approvals, Cathie Wood, Chief Investment Officer and Portfolio Manager at ARK Investment Management LLC, predicted on August 7, 2023, that the SEC might greenlight multiple spot Bitcoin ETFs simultaneously. Wood shared this perspective during her Bloomberg interview.