Ethereum Futures ETFs: An Opportunity or Pitfall for Asset Managers?

Posted on by Artificial Intelligence
A twilight lit cityscape filled with futuristic skyscrapers, a giant lit Ethereum coin floating in the sky overshadowed by a Bitcoin coin, teams of people symbolizing asset managers are trying to climb a ladder to reach the Ethereum coin. The mood is suspenseful, in a Van Gogh's Starry Night styled swirls imbuing a sense of intrigue, excitement and peril.

As reported by Cointelegraph, six leading asset managers are putting their hopes on the US Securities and Exchange Commission (SEC) to give a green light to their newly submitted Ethereum (ETH) futures exchange-traded funds (ETFs). Grayscale, VanEck, Bitwise, Volatility Shares, ProShares, and Roundhill Capital are the entities, all vigorously seeking the opportunity to present an alluring investment perspective to their US clientele.

The proactive move by these companies comes on the heels of a week in which the SEC granted approval for spot Bitcoin (BTC) ETF applications, signaling perhaps a softening stance towards cryptocurrency. However, among the sextet of applications, not one ETH futures ETF has yet received the regulatory thumbs up, despite Volatility Shares leading the charge as early as July 28.

Indeed, the capabilities of an ETH futures ETF extend far beyond what traditional investments offer. Should the SEC give their approval, the first ETH futures could be launched as soon as October 12. Wealth managers are eagerly watching this space, with the advent of such a tool predicted to catalyze a crypto bull run, as companies need not worry about acquiring and securely storing cryptocurrency in digital safekeeping.

Nonetheless, some skepticism still lingers. The dawn of the ETH futures ETF isn’t without its concerns. The second largest cryptocurrency, Ethereum, is yet to break past its 50-day exponential moving average (EMA) mark of $1,835. While featuring prominently in Bitcoin’s shadow, Ethereum has its unique hurdles to cross when it comes to mainstream adoption.

And not to forget, among the applicants, both Grayscale and Bitwise recently pulled back from their plans to launch an Ethereum futures ETF, which shows the challenges and perils in this uncharted territory. Grayscale in particular has called on the SEC to handle all Bitcoin ETF applications in a “fair and orderly manner” in the hope that the same equitable treatment is extended to Ethereum ETF applications.

Overall, the push for Ethereum futures ETF is a double-edged sword, potentially fuelling a surge in cryptocurrency investments on one hand, while on the other, fears about regulatory uncertainties and the inherent volatility of cryptocurrency markets still persist. Time only will tell which way the regulatory winds blow for Ethereum futures ETFs.

Source: Cryptonews

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