Invesco and Galaxy Digital Apply for Ethereum ETF
Asset management giant Invesco and Mike Novogratz’s Galaxy Digital have joined forces to apply for an Ethereum spot exchange-traded fund (ETF), following their previous joint application for a Bitcoin product. The proposed Invesco Galaxy Ethereum ETF aims to track the performance of the spot price of Ether by holding units of the cryptocurrency with a separate custodian. This application is one of four recent Ethereum spot ETF filings received by the Securities and Exchange Commission (SEC). With the imminent launch of an Ethereum futures product, industry experts believe that a spot ETF is the next logical step for crypto investment in the US.
Potential Launch of Additional ETFs
VanEck and Valkyrie have already gained approval this week, and Bloomberg ETF analyst James Seyffart suggests that Bitwise, ProShares, Hashdex, and Volatility Shares may also launch as early as October 2. However, Valkyrie faced issues with the SEC after purchasing Ether futures contracts prior to announcing its ETF’s trading date. The firm has agreed to unwind its position in ETH futures and will repurchase contracts only after the fund goes live next week.
The plot thickens, Valkyrie just put out 497 that they are in fact not going to buy Ether futures until they are live (prob Tue) and are going to sell the Eth futures they bought (in an effort to jump line a bit). SEC must have threatened them to cut it out. Damn. pic.twitter.com/cKaV7k7AJs
β Eric Balchunas (@EricBalchunas) September 29, 2023
Spot Crypto ETFs and SEC Challenges
While futures ETFs have received regulatory approval, spot crypto ETFs are still unavailable to US investors. Invesco and Galaxy’s Bitcoin spot ETF application has been delayed twice by the SEC, along with applications from BlackRock, Bitwise, and Valkyrie. The SEC is now facing pressure following a lawsuit loss to Grayscale, where a federal court criticized the agency’s repeated denial of Grayscale’s spot ETF product. The court deemed the denials “arbitrary and capricious” considering the agency’s openness to futures ETFs. Bitwise has amended its Bitcoin ETF application in anticipation of potential SEC rejections despite the court ruling.
Hot Take: Increasing Momentum for Crypto ETFs
The collaboration between Invesco and Galaxy Digital to apply for an Ethereum spot ETF reflects the growing momentum in the crypto industry towards securing regulatory approval for crypto exchange-traded funds. With several companies already gaining approval for their ETFs and others anticipated to launch soon, it seems that spot crypto ETFs are becoming more attainable for US investors. This development signals a significant step forward in bridging traditional finance and cryptocurrencies, providing investors with easier access to digital assets through familiar investment vehicles. As the SEC faces mounting pressure from legal challenges and market demand, it will be interesting to see how quickly these ETFs are approved and launched.
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