Ethereum Futures have witnessed a surge of interest as prominent investment firms have recently lodged new requests to introduce exchange-traded funds (ETFs) for investors within the United States.
Distinct applications have been formally submitted to the US Securities and Exchange Commission by renowned entities, including ProShares, VanEck, and Volatility Shares.
Citing insights from reliable sources, Blockworks reports that two individuals well-versed in the latest filings for Ethereum futures ETFs have indicated that the SEC is willing to openly deliberate on the possibility of introducing such a product to the market.
Ethereum Futures ETF In A Nutshell
Ethereum Futures ETFs represent investment vehicles that bundle together contracts promising the future price of the crypto. These ETFs allow investors to buy shares in this bundle, essentially betting on whether the future price of ETH will rise or fall.
It offers a way to speculate on Ethereum’s price movements without directly owning the cryptocurrency, making it a financial tool for those looking to gain exposure to Ether’s potential price changes in a more structured manner.
Regulatory Shift Sparks Ether Futures ETF Interest
Surprisingly, the SEC’s stance on Ether’s futures exchange-traded funds (ETFs) has taken a U-turn from May. During that time, insiders reported that the US securities regulator had advised companies pursuing the digital asset’s futures ETFs to pause their endeavors.
Commenting on this shift, Henry Jim, an analyst from Bloomberg Intelligence, shared on Twitter:
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
These new ETF applications emerge hot on the heels of recent submissions by established mainstream asset management firms, all vying to introduce Bitcoin ETFs. In this pursuit, even the world’s largest asset manager, BlackRock, has thrown its hat into the ring, aiming to pioneer the nation’s first Bitcoin (BTC) ETFs.
ETHUSD currently trading at $1,831. Chart: TradingView.com
ETF Strategies
ProShares has introduced its Short Ether Strategy ETF, presenting a unique investment approach focused on daily contracts linked to the S&P CME Ether Futures index. This innovative fund is designed to capitalize on the index’s losses. Under this strategy, the ProShares fund could gain an amount equivalent to the index’s losses on any given day, creating an inverse relationship between the fund’s performance and the index’s movement.
VanEck’s filing outlines a distinct investment strategy for its Ethereum-focused ETF. The approach involves investing in ETH futures contracts, structured to ensure the value of Ether exposure within the fund equals 100% of its total assets. This strategy aims to provide investors with direct and comprehensive exposure to the movements of the Ethereum market without the need for direct ownership of the cryptocurrency itself.
Volatility Shares has presented its vision for an Ether futures ETF that centers on cash-settled contracts referencing Ethereum trading on the Chicago Mercantile Exchange. Unlike some other ETFs, this fund will not directly invest in Ether. Instead, it will strategically allocate its assets in cash-settled contracts that mirror ETH’s market performance.
Featured image from CryptoTicker