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January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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The Race for Ethereum Futures ETF Applications
News | Aug 8, 2023
Image: Unsplash/Jievani Weerasinghe
The race for Ethereum Futures ETF applications has intensified, with numerous high-profile firms submitting their applications to the U.S. Securities and Exchange Commission (SEC).
Here's a comprehensive overview of the current landscape:
1. ProShares
- Ether Strategy ETF: Filed on 07/27/2023, with an expected SEC response by 10/11/2023. The ETF aims to list on the CBOE BZX Exchange. The proposed ETF will invest up to 25% of its assets in cash-settled Ether futures contracts traded on the CFTC-regulated Chicago Mercantile Exchange (CME). It may also invest in reverse purchase agreements and shares of other investment companies but will not directly invest in Ethereum.
- Short Ether Strategy ETF and ProShares Ether Strategy ETF: Both ETFs aim to qualify as regulated investment companies. Their investment in corresponding subsidiaries based in the Cayman Islands will not exceed 25% of the total assets at each quarter end of the fiscal year.
See: SEC Rejects Bid to Turn the Largest Bitcoin Fund Into an ETF -> Grayscale Sues SEC
2. Bitwise
- Ethereum Strategy ETF: Filed on 08/01/2023, with an expected SEC response by 10/16/2023. The ETF plans to list on the NYSE Arca. The fund will not invest directly in ETH futures contracts. Instead, investments will be channeled through a wholly-owned subsidiary in the Cayman Islands. The fund seeks to achieve its investment objective primarily through its investment in ETH Futures Contracts, with the remaining 75% of assets expected to be invested in U.S. Treasuries and other U.S. government obligations.
3. Roundhill
- Roundhill Ether Strategy ETF: The New York-based Roundhill Investments, with $662 million of assets under management across eight ETFs, plans to invest up to 25% of its assets in a wholly-owned subsidiary in the Cayman Islands.
4. VanEck
- VanEck Ethereum Strategy ETF: The ETF may invest in equity securities of ETH-related companies if it faces constraints like position limits or liquidity issues. The ETF also expects to have significant holdings of cash and fixed-income investments.
5. Grayscale Investments
- Grayscale Ethereum Futures ETF: The ETF is an actively-managed fund that seeks exposure to Ethereum futures contracts through a Cayman Islands-based subsidiary. The fund plans to hold approximately 100% of its net assets in Ethereum futures contracts but may also have significant holdings of cash and cash equivalent investments.
See: BlackRock’s Bitcoin ETF Filing Fuels Bullish Momentum for Grayscale Bitcoin Trust
6. Direxion
- Bitcoin Ether Strategy ETF: Direxion filed its application for a combined Bitcoin and Ether Futures Fund on 08/02/2023. The fund's shares would be issued and redeemed only in large blocks called "Creation Units," comprising 25,000 shares each.
7. Bitwise
- Bitcoin and Ether Market Weight ETF: The fund's strategy is to invest in either Bitcoin or Ether futures contracts, with the allocation based on the relative market capitalization between the two cryptocurrencies.
8. Proshares
- Bitcoin & Ether Strategy ETF Bitcoin: The fund seeks to qualify as a regulated investment company and expects to invest a portion of its assets in a wholly-owned subsidiary in the Cayman Islands.
See: Ninepoint Unveils Web3 Innovators Fund
The surge in applications indicates a growing interest and confidence in Ethereum futures among institutional investors. As the SEC reviews these applications, the crypto community eagerly awaits the potential approval and the subsequent impact on the Ethereum market.
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