The buzz around Bitcoin Spot Exchange-Traded Funds (ETFs) is fading away as investors and applicants wait for the United States Securities and Exchange Commission (SEC) to approve or dismiss them. But there are other ETFs currently causing excitement in the crypto market, the Ethereum Futures ETFs. Five top companies have already filed applications for such ETFs as of this writing.
If approved, an Ethereum Futures ETF will track the futures contracts of the second-biggest crypto. This will allow traditional investors who are scared of holding the asset directly to invest in it in a more regulated manner.
However, it is still unclear whether the SEC will approve any of these applications, considering that the agency has been leveling charges against several crypto players, accusing them of offering unregistered securities. The Gary Gensler-led agency has constantly said that all cryptocurrencies, except Bitcoin, are securities.
That said, here are the latest Ethereum Futures ETF applications.
Volatility Shares’ Ethereum Strategy ETF
Volatility Shares already has four ETFs, with a collective worth of $174 million. The company aims to be the first issuer of Ethereum futures ETF. Its filing with the SEC complies with all provisions under the 1940 Act, which governs capital structure and investment policies. Volatility Shares stated that it would invest 25% of the managed assets in Ethereum futures contracts listed on the Chicago Mercantile Exchange, which the Commodity Futures Trading Commission regulates.
In addition, the company may invest in stocks of other investment firms and reverse purchase agreements. However, it won’t inject funds directly into ETH.
Volatility Shares mentions CBOE BZX Exchange as its preferred trading platform to list its shares. The same exchange currently supports the trading of the company’s 2x Bitcoin Strategy ETF, a leveraged Bitcoin futures ETF approved by the SEC in June.
Meanwhile, the SEC is set to respond to Volatility Shares’ Ethereum Strategy ETF application on October 11.
Bitwise’s Ethereum Strategy ETF
Bitwise made a fresh Ethereum Futures ETF application on August 1 after withdrawing its first filing in late May. If approved, Bitwise will use its ETF to inject funds into cash-settled Ethereum futures contracts that mature within a short time. And like Volatility Shares, Bitwise will not invest directly in ETH.
In its filing, the firm classifies its ETF as “non-diversified,” making it possible for Bitwise to invest its assets in various financial instruments. However, the company won’t invest directly in Ethereum futures contracts. Instead, it will use its Cayman Islands-registered subsidiary to make such investments. The SEC will offer its response to Bitwise’s Ethereum Strategy ETF on October 16.
Roundhill’s Ethereum Strategy ETF
Roundhill is a New York-based investment adviser registered with the SEC. The company is focused on exposing investors to innovative financial products. As of this writing, it has eight ETFs with $660 million in total funds. Roundhill is looking to add a crypto-focused ETF to its offerings.
In its Ethereum futures ETF application, the company explained that it would use the fund to invest in Ethereum futures contracts listed on Chicago Mercantile Exchange.
The SEC is expected to respond to Roundhill’s ETF application on October 17.
VanEck’s Ethereum Strategy ETF
After filing its Bitcoin Spot ETF proposal with the SEC in June, VanEck applied for Ethereum futures ETF on August 1. If approved, the firm will use the fund to buy shares of Ethereum-related companies, that is, firms listed on United States stock exchanges that offer returns closely related to ETH’s performance. Also, VanEck will use its ETF to invest in investments that offer fixed returns in order to ensure adequate liquidity.
The SEC will deliver its response to VanEck on October 16.
Proshares’ Ethereum Strategy ETF
Like most filed Ethereum Futures ETF applications, Proshares seeks to use its fund to invest in Ethereum futures contracts on Chicago Mercantile Exchange. However, unlike others, the firm’s ETF will be “non-fundamental.” This means Proshares’ board of directors can make amendments without the fund’s shareholders’ approval.
ProShares expects the SEC’s response on October 18.
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