Race heats up to launch first US-listed ether futures ETF

Aug 4th, 2023 | By | Category: Commodities

Half a dozen investment managers are vying to be the first in the US to launch an ETF that provides exposure to ether by way of futures contracts.

Race to launch first US-listed ethereum futures ETF heats up

Six prospective issuers have recently submitted applications to the SEC to launch futures-based ether ETFs.

Volatility Shares, ProShares, Grayscale Investments, Roundhill Investments, VanEck, and Bitwise Asset Management have all submitted product launch applications with the Securities and Exchange Commission (SEC) over the past two weeks.

Ether is the second-largest crypto asset with a total market capitalization of approximately $222 billion or roughly 18.5% of the $1.2 trillion invested across the entire digital asset ecosystem.

Despite greenlighting bitcoin futures ETFs in 2021, the SEC has thus far rejected any application for an ETF targeting ether futures. The regulator has cited issues such as lower liquidity in ether futures compared to bitcoin futures, as well as questions over whether ether qualifies as a commodity after it moved from a proof-of-work model to proof-of-stake last year.

While the SEC has not openly indicated a more favourable stance on the matter, excitement has been growing in the crypto space as anticipation builds that the regulator may finally approve the listing of spot bitcoin ETFs. BlackRock, the world’s largest ETF issuer, threw its hat into the ring in June by filing its own spot bitcoin ETF application, while Fidelity, ARK Invest, Bitwise Asset Management, WisdomTree, VanEck, Invesco, and Valkyrie also currently have active filings with the SEC for the listing of spot bitcoin ETFs.

Whether the SEC is receptive to the new flurry of applications for ether futures ETFs remains to be seen. If the regulator doesn’t refuse the applications, the Volatility Shares Ether Strategy ETF is scheduled to be the first to list on 12 October.

Being first to market appears to hold a significant advantage. The ProShares Bitcoin Strategy ETF (BITO US) currently houses nearly $1.1 billion in assets, considerably more than its competitors despite being first to market by just a few days.

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