In a race to capitalize on the success of Bitcoin ETFs, six prominent firms have recently submitted applications to the SEC for Ether futures ETFs, potentially injecting new life into Ethereum (ETH) as the cryptocurrency struggles to gain momentum in recent weeks.
Ether futures ETFs Explained
Ether futures ETFs are investment products designed to track the price of Ether futures contracts. These contracts are agreements to buy or sell Ether at a predetermined price and date in the future and are currently traded on the Chicago Mercantile Exchange (CME), the world’s largest derivatives marketplace.
Ether futures ETFs offer several benefits for investors seeking exposure to Ethereum without the need to directly buy or store the underlying asset. These investment vehicles may provide increased liquidity, lower fees, tax advantages, and regulatory clarity compared to other crypto investment options.
Additionally, they can help mitigate the volatility and risk associated with holding Ether directly, as they are not susceptible to factors like hacking, theft, or technical glitches.
Meet the Six Applicants
- Volatility Shares: A trailblazer in the space, Volatility Shares, known for the 2X Bitcoin Futures ETF (BITX) approved last month, seeks to launch the Volatility Shares Ether Futures ETF (ETHX). This proposed fund aims to provide investors with twice the daily return of Ether futures contracts traded on the CME.
- Bitwise: Having refiled its application for an Ether futures ETF with some modifications, Bitwise, a crypto asset manager, plans to track an index measuring the performance of a portfolio of Ether futures contracts traded on the CME and other eligible exchanges.
- VanEck: The veteran ETF provider has also resubmitted its application, proposing the VanEck Ethereum Futures Strategy ETF, which will invest in Ether futures contracts traded on the CME and other eligible exchanges, alongside cash and cash equivalents.
- Roundhill: Stepping into the crypto arena, Roundhill’s first crypto-related product, the Roundhill Ethereum Futures Strategy ETF, aims to invest in Ether futures contracts traded on the CME and other eligible exchanges, alongside cash and cash equivalents.
- ProShares: As the leading provider of leveraged and inverse ETFs, ProShares seeks to introduce two Ether futures ETFs: the ProShares Ethereum Strategy ETF, which provides investors exposure to Ether futures contracts traded on the CME and other eligible exchanges, and the ProShares Inverse Ethereum Strategy ETF, offering inverse exposure to the same contracts.
- Grayscale: The largest crypto asset manager, Grayscale, plans to launch the Grayscale ETHE Trust, an Ether futures ETF investing in Ether futures contracts traded on the CME and other eligible exchanges, along with cash and cash equivalents.
What Are the Chances of Approval?
While the SEC has previously been hesitant to approve crypto-related ETFs, the recent approval of Bitcoin-futures-based ETFs in the US may pave the way for similar products based on Ether futures. Analysts believe that applicants with strong track records, reputations, or relationships with the SEC might have an edge in obtaining approval.
Regardless, the final outcome is hard to predict. However, one thing is clear: there is a strong demand for Ether futures ETFs among investors. Everyone wants to access the potential of Ethereum in a convenient and regulated way. Whether or not the SEC will grant their wishes remains to be seen.
ETH Remains Flat
Ethereum continues to trade in a subdued state, remaining in a pass-and-play between the $1,880s and the $1,845 support. This is despite the recent news of Ether futures applications, as highlighted above.
While ETH remains confined within a sideways pattern, it’s titled more toward the downside. This bias is highlighted by the recent attempts to break below over the past 48 hours on the daily chart. That said, a full-bodied candle close below the $1,845 mark could spark renewed bearish momentum. It could possibly drag ETH below the $1,800 mark for the first time since late June and, subsequently, $1,700.
ETH Statistics Data
Current Price of ETH/USD: $1,845
ETH Market Cap: $223.4B
ETH Circulating Supply: 121.3M
Total Supply: 121.3M
ETH Market Ranking: #2
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