SEC greenlights the first-ever Ethereum Futures ETF, marking a major milestone in the crypto industry. Valkyrie’s listing, expected in October, signals a turning point for Ethereum investors.
The United States Securities and Exchange Commission (SEC) is expected to approve the first-ever exchange-traded funds (ETFs) based on Ether futures, a breakthrough for the crypto industry. As per Bloomberg, the approval will likely happen in October, providing several firms, including Volatility Shares, Bitwise, Roundhill, and ProShares, an opportunity to launch these products. These companies have long sought to offer Ether futures-based ETFs.
The regulator, SEC, has previously resisted allowing an ETF directly based on a cryptocurrency but has started allowing trading in a fund that involves Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME). This move has fueled speculation that a similar product based on Ether futures traded on CME would be next.
The rise of Ether futures ETFs
Despite the buzz, the SEC’s approval for a product involving derivatives in Ether has been slow. This development is significant as Bitcoin, the world’s largest cryptocurrency, holds a market value of roughly $506 billion, while Ether’s market capitalization stands at $199 billion, according to data from CoinMarketCap.
However, the SEC has been concerned with the transparency and information presented in filings submitted by asset managers seeking to launch a Bitcoin ETF. Asset managers eagerly await the SEC’s response regarding the decision on ETFs directly linked to Bitcoin.
High-stakes legal battle
In a related report, the financial world’s attention is now focused on the case of Grayscale Investments vs. SEC, a lawsuit that holds the potential to reshape the cryptocurrency market. Grayscale Investments has challenged the SEC’s decision to reject its Bitcoin trust ETF application. In a March 2023 hearing, Grayscale argued that the SEC’s decision contradicted its previous orders regarding approving the GBTC spot Bitcoin ETF.
SEC representatives have come under intense scrutiny over their reasoning for the rejection. Legal analysts from Bloomberg believe that Grayscale has a strong case, with a 70% chance of winning the lawsuit.
Another reason we give spot bitcoin ETF approval 50% chance is our senior legal analyst @NYCStein gives Grayscale a 70% chance of winning case against SEC, who could approve BlackRock's ETF as way to save face using trusted 'adult' TradFi cos & stick it to Grayscale via @JSeyff pic.twitter.com/pHydOcpuQo
— Eric Balchunas (@EricBalchunas) June 27, 2023
The decision on this lawsuit has been delayed twice and is now expected on August 22. Eager investors and industry experts wonder how this decision might impact the crypto ecosystem.
Industry response
Cathie Wood, the CEO of Ark Invest, opined that the SEC would not grant approvals for firms’ Bitcoin ETFs individually. Ark Invest is currently awaiting a decision on its spot price Bitcoin ETF. Wood believes that if the SEC approves a Bitcoin ETF, it will approve more than one at once.
Cathy Wood believes SEC may approve multiple #BTC ETFs simultaneously. Bloomberg ETF analyst James Seyffart also believes regulators' least resistance path is approving all or at least several spot BTC ETFs simultaneously. pic.twitter.com/xlmLOtSgj0
— Crypto Crib (@Crypto_Crib_) August 8, 2023
Asset managers have proposed multiple ETFs, including the Ether Strategy ETF, Bitwise Ethereum Strategy ETF, Roundhill Ether Strategy ETF, VanEck’s Ethereum Strategy ETF, ProShares Short Ether Strategy ETF, and the Grayscale Ethereum Futures ETF.
The anticipated approval of the first Ethereum Futures ETF in October signals a turning point for Ethereum investors. Valkyrie’s listing, expected in October, is a critical step in advancing cryptocurrency adoption in traditional financial markets. As the SEC greenlights this ETF, investors will have a new way to gain exposure to Ethereum, diversifying their portfolios and expanding their investment options.
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