The latest sign of crypto going mainstream among traditional investors is the race heating up to launch the first exchange-traded fund (ETF) tied to Ethereum futures. In recent weeks, six companies have filed proposals with the Securities and Exchange Commission (SEC) to launch Ethereum futures ETFs.
The Race To Launch An Ethereum Futures ETF
Cryptocurrency ETFs track the price of the digital currencies they are tied to and they are not a new thing in the crypto industry. Bitcoin futures have gained popularity in recent years and are already being offered by popular investment companies.
However, with bitcoin futures ETFs now established, it is only natural for the next hot product to be an Ethereum futures ETF. So far, more than 10 Ethereum futures ETFs have been filed in the past, but none have been approved by the SEC.
Volatility Shares Ether Strategy ETF was the first to be filed on July 28. Since then, Bitwise Ethereum Strategy ETF, Roundhill Ether Strategy ETF, VanEck’s Ethereum Strategy ETF, and Proshares Short Ether Strategy ETF have been filed and are awaiting clearance, as reported by Bloomberg Intelligence.
Now, Grayscale Investments is also looking to join the pack with its new Ethereum Futures ETF filing. After withdrawing its filing earlier due to SEC concerns, the digital currency asset management company is now back with a better application. Bitwise, another crypto index fund manager, also withdrew its previous filing at the same time.
ETH price jumps to $1,839 | Source: ETHUSD on Tradingview.com
According to the filing, the majority of the Grayscale Investments fund’s assets would be placed in Ether futures contracts with “front-month” maturities, which have “the shortest time to maturity.” The company also intends to diversify into other Ethereum contracts in the coming future.
Why Ethereum Futures ETFs Are Gaining Traction
The buzz around crypto ETFs was recently ignited by the news of BlackRock and other investment companies filing applications with the SEC for Spot Bitcoin ETFs. However, the SEC is still yet to give the go-ahead, citing failure to meet anti-fraud and investor protection standards in past applications.
Analysts report that BlackRock’s Bitcoin ETF could unlock $30 trillion worth of wealth. Of course, there’s no guarantee if or when they may get the green light.
For crypto investors and the industry, an Ethereum futures ETF would no doubt be a game changer. If approved, Ethereum futures would become available to investors 75 days after the application date. It would provide an easy, low-cost way for investors of these investment companies to gain exposure to the second-largest cryptocurrency by market cap.
As for ETH’s spot price, it has been struggling to break above $2,000 this year. At the time of writing, ETH is trading at $1,843.96. But if the filings are approved by the SEC, it may signal the beginning of the next Ethereum bull run.
Featured image from iStock, chart from Tradingview.com