The latest buzz in the crypto world is the potential introduction of a spot Ethereum (ETH) ETF. Investment powerhouses, Invesco and Galaxy Digital, are spearheading this initiative. The proposed Invesco Galaxy Ethereum ETF aims to embody the performance of the spot price of ether, by holding units of the much-discussed cryptocurrency with yet-to-be identified custodians.
This development emerges amongst a slew of investment managers, some even queueing at SEC’s regulatory door, each bearing their version of an ETH ETF proposal. While Invesco is tipping the hat as the sponsor, Galaxy Digital has been appointed the “execution agent”, tasked with selling ETH to meet the Trust’s expenses.
Simultaneously, firms are also manoeuvring to add futures-based Ether ETFs to their portfolios. It’s worth a mention that the SEC recently procrastinated decisions regarding ARK 21Shares’ and VanEck’s applications until Christmas Eve and Boxing Day. The excuse provided was insufficient time to review the proposed rule changes and related issues.
In an interesting turn of events, these ETH futures ETFs might see the light of day sooner than expected; some firms expect to launch live futures as early as the following week. VanEck‘s Ethereum Strategy ETF (tickered EFUT) will soon grace the Chicago Board Options Exchange, whereas Valkyrie plans to utilise its Bitcoin Strategy ETF to offer exposure to Ether futures.
Despite the palpable enthusiasm, it’s important to remember that the SEC has historically shown reluctance towards spot bitcoin ETFs, attributing this caution to concerns of market manipulation and potential investors’ vulnerability. Conversely, future ETH ETFs appear to be on the right side of SEC’s viewpoint due to the futures’ presence on the CME and their direct investment in futures contracts. Categorised as commodities by the regulatory body, these futures ETFS are believed to better protect investors against price manipulation.
The buzz surrounding the potential of futures ETFs is galvanising the sector; in fact, Ether, at the moment, trades at a good $1,600, marking its growth and anticipation. With reports hinting at SEC potentially green-lighting Ether futures ETFs in the early days of October, an aura of keenness is gaining momentum amongst asset managers. As the SEC navigates these choppy regulatory waters, only time will showcase the embodiment of this transformative tech into ETF forms.
Source: Cryptonews
