Invesco Collaborates with Galaxy Digital to Propose Ethereum Spot ETF
In a recent development, Invesco, a major player in asset management, has partnered with Galaxy Digital to propose an Ethereum (ETH) spot exchange-traded fund (ETF). This follows their joint efforts in June to introduce a Bitcoin (BTC) equivalent.
The Design of the Invesco Galaxy Ethereum ETF
The Invesco Galaxy Ethereum ETF aims to mirror the actual spot price of ether. It will achieve this by holding onto ether units under the care of an unidentified custodian. Invesco will be the main sponsor, while Galaxy Digital will act as the “execution agent”, responsible for selling ETH to cover the Trust’s costs.
Recent Surge in Ethereum Spot ETF Applications
The SEC has been receiving numerous applications for Ethereum spot ETFs. Prior to this proposal, Ark Invest/21Shares, Hashdex, and VanEck submitted their applications earlier in the month.
Potential Additions to the List of Approved ETFs
With the almost confirmed introduction of an Ethereum futures product, a spot ETF is seen as the logical next step for U.S. cryptocurrency investments. Valkyrie and VanEck have recently secured approvals, and potential additions like Bitwise, ProShares, Hashdex, and Volatility Shares are expected by October 2.
Ongoing Regulatory Hurdles for Spot Crypto ETFs
While futures ETFs are gaining traction with regulators, spot crypto ETFs remain elusive for U.S. investors. The SEC has postponed the joint Invesco-Galaxy Bitcoin spot ETF initiative and other similar proposals since June.
Delays and Scrutiny Surrounding SEC’s Decision-Making
The SEC is facing significant scrutiny following a legal defeat against Grayscale. The agency’s continuous refusal of spot ETF offerings has been deemed “inconsistent and unwarranted”. Bitwise has revised its Bitcoin ETF proposal to address potential SEC objections.
Uncertain Deadlines and Possible Government Shutdown
Ark 21 Shares and Global X have also faced delays in their application decisions. The SEC’s Chairman has expressed concerns about the agency’s operational capacity due to an expected government shutdown starting October 1.
Futures Contracts Traded on the Chicago Mercantile Exchange
Futures ETFs typically invest in contracts traded on the Chicago Mercantile Exchange (CME). This offers an extra layer of protection against price tampering. The SEC is rumored to approve Ether futures ETFs by early October, generating interest among asset managers.
Ethereum’s Bullish Phase
Ether is currently experiencing a bullish phase, priced at around $1,600. This sentiment is fueled by the impending launch of futures ETFs.
Hot Take: Invesco and Galaxy Digital Collaborate to Propose Ethereum Spot ETF
Invesco and Galaxy Digital have joined forces to propose an Ethereum spot exchange-traded fund (ETF). This move comes after their previous partnership to introduce a Bitcoin equivalent. The Invesco Galaxy Ethereum ETF aims to mirror the actual spot price of ether and will be sponsored by Invesco with Galaxy Digital acting as the execution agent. While the SEC has received several applications for Ethereum spot ETFs, regulatory hurdles remain for U.S. investors. However, there is optimism surrounding the potential approval of Ether futures ETFs in early October, which could pave the way for further cryptocurrency investments in the United States.
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