Cryptocurrency companies have been keenly eyeing the possibility of launching ETFs that would invest in Ether futures contracts. After Grayscale Investments shared plans earlier this week to launch such a product, other firms, including Bitwise Asset Management, Direxion and Roundhill Investments, have followed suit and have all submitted applications to the United States Securities and Exchange Commission (SEC).
These proposed offerings would each invest in ether futures contracts traded on the Chicago Mercantile Exchange (CME) while none of them would hold ether directly. Sumit Roy, an analyst at ETF.com, believes other issuers are "piggybacking" on Grayscale's filing because of the lawsuit the firm is having with the SEC. Grayscale is challenging the latter's decision to block the conversion of its Grayscale Bitcoin Trust (GBTC) to an ETF.
The recent product proposals come after several bitcoin futures ETFs were approved for trading in the United States. However, bids to launch Ether Futures Funds were not successful yet. VanEck and ProShares filed for funds in 2021 that invested in ether futures contracts but withdrew their applications just two months before the first Bitcoin Futures ETFs began trading. At the time, it was speculated that they backed out due to indications that the SEC would not give approvals in the near future. It is uncertain when or even if the companies will refile their applications.
Currently, there are still open questions on how the SEC views Ethereum and its staking products. The Commodity Futures Trading Commission has deemed Ethereum as a commodity yet SEC Chair Gary Gensler believes most crypto assets (except for Bitcoin) are securities. This ambiguity on the status of Ethereum makes it unlikely that the proposed ETFs will be approved until a verdict in the Grayscale case is made. Even when settling a case in February, crypto exchange Kraken still couldn't clarify the status of Ethereum.
To sum up, firms that try to launch cryptocurrency ETFs that invest in Ether futures contracts have not achieved success yet but are eagerly eyeing the possibility of doing so. Other companies have sought to follow suit and adopt this type of product after Grayscale Investments started its own filing. The success of any of these initiatives is doubtful as the SEC still remains uncertain whether Ethereum should be considered a commodity or a security.
Nicole Gomez
- 2023-05-11
Hopes for Ether Futures ETFs Remain High
Despite a lack of success in the past, cryptocurrency companies have been eager to launch ETFs that would invest in Ether futures contracts. SEC is still uncertain whether Ethereum should be considered a commodity or a security, causing indecision on the approval to these proposed ETFs.
