The US Securities and Exchange Commission (SEC) has been inundated with applications for Ethereum (ETH) Exchange-Traded Funds (ETFs) in just one week. The applications currently stand at 12, with the latest addition coming from ProSharesa popular fund manager.
The platform submitted four applications for Ether-based ETFs, including a dual Ether and Bitcoin futures strategy ETF, an Ether Strategy ETF and a short Ether Strategy ETF.
Will the SEC Approve an Ethereum Futures ETF?
The recent wave of requests started on July 28 of this year after Volatility Shares filed its application. Since then, other asset managers, including ProShares, Roundhill Financial, Bitwise, Van Eck and Grayscale Investment, have filled out submissions, some of which have submitted multiple applications.
The most recent filing, filed Aug. 3 by ProShares, proposes an equal weight Bitcoin and Ether ETF to measure the performance of holding long positions in the nearest expiring monthly Ether and Bitcoin contracts.
According to Bloomberg Intelligence’s renowned financial expert, James Seyffart, ProShare archived four separate filings with the SEC. Bitwise also submitted three applications, while Grayscale Investments has submitted two applications.
However, despite growing optimism, it remains to be seen whether the Securities and Exchange Commission will approve these filings. The SEC has never approved an ETF that tracks Ether Futures contracts, unlike Bitcoin Futures ETFs that have been around since October 2021.
Many market experts have argued that these uses are just a guess by these asset managers, who don’t want to miss out on being the first Ethereum ETF in the United States.
ETH price holds steady above $1,830 amid ETF race | Source: ETHUSD on Tradingview.com
The likelihood of SEC approval remains slim as the regulatory body has never approved an Ethereum futures ETF filing. Add to the mix the consistent refusal of SEC Chairman, Gary Gensler, consistently refusal to answer if the agency considers ETH a security. This has further exacerbated regulatory uncertainty surrounding the network.
If none of the applications are rejected before the SEC, the Ether ETFs will launch 75 days after their respective filing dates. Analysts expect the Volatility Shares ETF to take the lead on Oct. 12.
Understand the difference between futures and spot ETF products
The main difference between futures and spot ETF products lies in the fact that while the former tracks the price of futures contracts, the latter requires the issuers to purchase the underlying asset. Spot ETFs are generally considered more valid because they require the fund manager to buy and hold underlying assets.
The current spike in Ether-based applications comes amid a wave of signups from leading asset managers, including BlackRock, the world’s largest asset manager, among others. These companies aim to offer the #1 Bitcoin ETF in the US.
Investors and members of the crypto community remain awaiting the outcome of the SEC’s consideration of the filings before it. Whatever decision the agency makes is likely to affect the attractiveness and accessibility of crypto investments, especially for larger institutional investors.
Featured image from iStock, chart from Tradingview.com