The SEC to Greenlight Ether ETFs Based on Futures
The United States Securities Commission (SEC) is set to approve the first exchange-traded funds (ETFs) based on Ether (ETH) futures, marking a significant win for the crypto industry. Several companies, including Bitwise, Roundhill, ProShares, and Volatility Shares, have filed applications with the SEC to launch ETFs.
Changing Stance of the SEC
The SEC has previously blocked attempts at ETFs based directly on cryptocurrencies. However, in late 2021, the regulator allowed trading in a fund involving Bitcoin futures contracts on the Chicago Mercantile Exchange. There has been growing speculation that the SEC would permit a product with Ether futures traded on the exchange.
Pushback Against Bitcoin ETFs
The SEC is still resisting Bitcoin-based ETFs and is currently in a standoff with the crypto industry. Grayscale Investments has challenged the SEC’s rejection of its application to convert its Bitcoin trust into an ETF. The SEC has raised concerns about price manipulation, insufficient liquidity, and Bitcoin’s volatility as threats to investors.
Valkyrie’s ETF Filing
Valkyrie, an asset management firm, has submitted an application to the SEC for an Ethereum futures ETF. If approved, the ETF would allow investors to speculate on ETH’s future price movements through futures contracts. Valkyrie plans to invest in cash, cash-like instruments, and high-quality securities alongside the futures contracts.
Hot Take
The SEC’s potential approval of Ether ETFs based on futures is a positive development for the crypto space, signaling increasing acceptance and recognition of digital assets. While the SEC remains cautious about Bitcoin ETFs, the growing interest and applications from asset managers indicate a strong demand for more crypto investment options.
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