The U.S. Securities and Exchange Commission (SEC) is reportedly preparing to approve the first exchange-traded funds (ETFs) based on Ether futures, marking a significant advancement for firms that have long sought to offer such products. According to sources familiar with the matter, the regulator is unlikely to block the products, which would be based on futures contracts for Ether, the second-largest cryptocurrency.
First Exchange-Traded Funds based on Ether Futures await green light
Nearly a dozen companies, including Volatility Shares, Bitwise, Roundhill, and ProShares, have filed to launch the ETFs. While it remains unclear which funds will receive approval, officials have indicated that several might be greenlit by October. The SEC has declined to comment on the matter.
This development follows the SEC’s decision in late 2021 to allow trading in a fund involving Bitcoin futures contracts that trade on the Chicago Mercantile Exchange (CME). Speculation has been growing that a product with Ether futures, also traded on CME, would be next in line. Despite the anticipation, SEC approval for a product involving derivatives in Ether has been slow to materialize.
Ether’s market value stands at $195 billion, compared to Bitcoin’s $512 billion, according to CoinGecko. Ether’s price, at $1,600, has dropped about 11% so far this month.
Bitcoin ETFs remain contentious: Wall Street giants seek direct crypto holdings
Meanwhile, the SEC continues to wrestle with the industry over its resistance to ETFs based on Bitcoin itself. In a high-profile case, a panel of U.S. federal appellate court judges is set to rule on a lawsuit by Grayscale Investments LLC, challenging the SEC’s denial of an application to convert its Bitcoin trust into an ETF.
The SEC has maintained that the crypto space is fraught with investor risks, expressing concerns over potential price manipulation, insufficient liquidity, and drastic price swings that might be overwhelming for individual investors.
Several firms, including BlackRock Inc., have recently filed applications to list ETFs based directly on Bitcoin. The BlackRock filing in June helped push Bitcoin’s price above $31,000, though it has since hovered around $29,000 and traded near $26,000 on Thursday.
The anticipated approval of Ether futures ETFs represents a milestone in the evolving landscape of cryptocurrency investment products. While the industry eagerly awaits decisions on ETFs holding Bitcoin itself, the potential green light for Ether futures ETFs signals a growing acceptance of crypto derivatives and a cautious approach by regulators in a rapidly changing financial environment.