Six major asset managers, including Grayscale and VanEck, have recently filed new applications to launch Ethereum Futures exchange traded funds (ETFs) for customers in the United States, according to filings submitted to the U.S. Securities and Exchange Commission (SEC).
Grayscale’s filing includes two applications: a proposed Grayscale Global Bitcoin Composite ETF and a Grayscale Ethereum Futures ETF. The Ethereum Futures ETF will invest in futures contracts that are set to be traded on the Chicago Mercantile Exchange. Grayscale’s fund will primarily invest in “front-month” Ether futures, which are contracts with the shortest time to maturity. They also plan to roll Ether Futures contracts before they expire.
Volatility Shares has also outlined plans to list an Ethereum Futures ETF that will invest in cash-settled contracts referencing ETH trading on the Chicago Mercantile Exchange. The fund will not directly invest in Ether. In its filing, Volatility Shares noted that it intends to enter into cash-settled Ether Futures Contracts as the buyer. In cash-settled futures markets, if the price of a futures contract goes up, the counterparty pays cash to the buyer, while the buyer pays the counterparty if the price goes down.
VanEck’s filing indicates that its investment strategy for its Ethereum ETF will also involve investing in ETH Futures contracts to ensure that the value of ETH which the fund has exposure to is equal to 100% of the total assets of the fund. Any changes in the value of ETH would result in larger changes to VanEck’s Ether ETF fund, potentially leading to greater losses than if the fund’s exposure to the value of ETH were unleveraged.
ProShares has provided an overview of their Short Ether Strategy ETF, which will invest in daily contracts aiming to profit from losses in the S&P CME Ether Futures index. The ProShares fund aims to gain as much as the index loses on a given day, while the converse would also apply.
These applications come in the wake of recent applications from mainstream asset management firms looking to launch Bitcoin ETFs. BlackRock, the world’s largest asset manager, is among those interested in offering the first Bitcoin ETFs in the country.
In total, there are now five different Ethereum futures ETF filings submitted to the SEC, reflecting the growing interest in offering investment opportunities related to Ethereum. These ETFs would provide institutional and retail investors with a regulated way to gain exposure to the price movements of Ethereum without directly owning the cryptocurrency.
If approved, these ETFs could further legitimize Ethereum as an asset class and potentially attract more investors to the cryptocurrency market. The increasing interest in both Bitcoin and Ethereum ETFs demonstrates the growing acceptance and demand for these digital assets in traditional financial markets.
Overall, the filings from asset managers like Grayscale, VanEck, BitWise, Volatility Shares, ProShares, and Round Hill Capital signal a significant step towards the wider adoption of Ethereum and crypto assets in the traditional investment landscape. As these filings go through regulatory review, the future of Ethereum ETFs in the United States will become clearer.
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