The United States Securities and Exchange Commission is poised to approve the first-ever exchange-traded funds (ETFs) based on Ethereum futures, according to Bloomberg, citing unnamed sources.
This move will mark a huge win for multiple financial companies that have been advocating for the introduction of ETFs involving derivatives of the second-largest cryptocurrency for a long time.
SEC Said To Be Ready To Approve ETFs Based On Ethereum Futures
The Securities and Exchange Commission is not likely to block the debut of ether futures trading in the U.S., according to sources.
Nearly a dozen companies, including ProShares, Volatility Shares, Bitwise, and Valkyrie, have recently applied to list Ethereum futures ETFs. But they need the SEC’s greenlight — something Bloomberg said might be coming soon. Such an ETF would track the price of Ethereum futures that are traded on the Chicago Mercantile Exchange, rather than ether itself.
Officials have reportedly indicated that some of the applications could receive approval as early as October, with Valkyrie’s dual Bitcoin and Ether Strategy ETF being first in the line for a possible launch around Oct. 3 or Oct. 4.
Valkyrie also filed for its Ethereum Strategy ETF earlier this week. However, the first exclusive ether futures ETF listed by Volatility Shares could go live around October 12.
Bloomberg Intelligence ETF analyst Eric Balchunas said he wasn’t surprised by the SEC’s expected move to approve Ethereum futures ETFs, adding that the decision indicates how the regulatory agency’s views on myriad products, such as a spot Bitcoin ETF can evolve over time.
This not surprising to us, we had said they would approve Ether Futures early on in race. Nice to be validated. Now what does it mean for spot? Hard to say beyond it shows that their views/policy/tolerance can change. https://t.co/JXCxNUpj2U
— Eric Balchunas (@EricBalchunas) August 17, 2023
The SEC has thus far refused to give its regulatory blessing to any spot bitcoin or ether ETFs. The regulator has also not yet clarified whether it considers ether a security — although it has indicated that most crypto tokens qualify as securities.
The approval of an ether futures ETF by the SEC brings huge implications for the crypto sector. As suggested by crypto strategist Adam Cochran, this imminent move essentially implies that the agency does not categorize Ethereum as a security.
Ether Dumps Amid Market-Wide Sell-Off
Despite the upbeat news of the potential launch of ether futures ETFs, the industry’s second-biggest cryptocurrency suffered a massive price plunge to its lowest levels since mid-June.
Amid the latest market downturn, which also saw Bitcoin (BTC) crash below the $26,000 region, ETH tumbled to as low as $1,576.13 before rebounding slightly to $1,683.54 at publication time.
Despite recouping some of the losses, Ethereum remains down 5.8% on the day, according to CoinGecko data.
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