The US Securities and Exchange Commission (SEC). Reportedly preparing to approve several exchange-traded funds (ETFs) that simultaneously track Ethereum futures. This move represents a potential shift in regulatory attitudes toward digital asset-based ETFs.
Wealth management firm Volatility Shares has announced plans to launch its ETF, which tracks futures linked to Ethereum, on October 12. This could potentially mark it as the inaugural Ethereum futures ETF in the US. In a parallel development, Valkyrie, another prominent asset management entity, is looking forward to an early October launch for its BTC-Ethereum ETF.
The SEC has witnessed a deluge of filings since July, with more than 16 ETF proposals, either exclusively for Ethereum or combined with Bitcoin, currently in the regulatory pipeline. Unlike the approach for 2021, where the SEC directed companies to withdraw similar filings, the regulatory body refrained from issuing such guidance this year. This change indicates a more accommodating regulatory environment for such ETFs.
Unlike direct cryptocurrency investments, a crypto futures ETF channels its investments into futures contracts tied to the prices of digital assets such as Bitcoin or Ethereum. The ETF industry underscores the importance of the first-mover advantage. To illustrate, ProShares’ Bitcoin futures ETF, launched in October 2021, amassed more than $1 billion in assets under management, while Valkyrie’s analog product, launched shortly after, raised nearly $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 simultaneous approvals of Ethereum futures, Cathie Wood, Chief Investment Officer and Portfolio Manager at ARK Investment Management LLC, predicted on August 7, 2023 that the SEC could greenlight multiple spot Bitcoin ETFs at once. Wood shared this perspective during her Bloomberg interview.