By
Bena Ilyas
May 3rd, 2024
The Ether futures ETF tracks the futures contract of Ethereum.
The US Securities and Exchange Commission (SEC) is reportedly ready to approve Ether futures exchange-traded funds (ETFs), according to Bloomberg. Thus, its approval would mark a significant milestone for investors looking to gain exposure to the second-largest cryptocurrency by market capitalization.
So far, there have been 16 active filings for an Ether Futures ETF. It is unclear which ETF application the SEC may approve. However, officials suggest there may be an approval by October.
New Territory for Ether Futures ETF Approval
Valkyrie Investments, Volatility Shares, Direxion, Grayscale, VanEck, Roundhill, Proshares, and Bitwise have all filed ETF applications. The longest of these filings is by Valkyrie Investments and has been active for 19 days.
According to Bloomberg analyst Eric Balchunas, historically, the SEC would have asked companies seeking approval for Ether futures ETF to withdraw their filing in 5-6 days.
“We are now on Day 13 and no withdrawals. Not home-free yet but very good sign. As we predicted these will likely hit market in mid-October,” tweeted Balchunas.
Another analyst, James Seyffart, noted that the odds of an approval increases as more days pass between the filing and the SEC’s response.
Spot ETF vs Futures ETF
While the SEC is more likely to approve the Ether futures ETF, it remains unclear what its stance is on filings for the Bitcoin spot ETFs. This is not surprising since the SEC has different standards for approving futures-based ETFs and spot-based ETFs.
Previously, the SEC has expressed concerns about the potential for fraud and manipulation in the BTC spot market. It also noted the lack of reliable data and custody solutions. Consequently, the regulator has rejected several proposals for spot bitcoin ETFs, citing these reasons. Conversely, the SEC has approved several proposals for futures-based bitcoin ETFs.
The first Bitcoin (BTC) futures ETF launched in the US in 2021. Since then, BTC futures ETFs have attracted billions of dollars in inflows. The largest Bitcoin ETF is the ProShares Bitcoin Strategy ETF, with over $980 million in assets under management. The Ether Futures ETF is more similar to the Bitcoin Futures ETF, so the chances of approval remain.
Following the news, the price of ETH rallied after crashing just a few hours before. At the time of writing, Ether was trading at $1691.