Ethereum (ETH) Joins the Race for Crypto Futures-backed ETFs

VanEck is the one filing for an Ether ETF under the 1940 Act, which has also filed for the same one for Bitcoin along with physically-backed Bitcoin and Ether ETFs. OI on Ether futures on CME is one-third of Bitcoin’s OI, but it was listed just six months back and hit a new ATH last weekend.


In the growing number of exchange-traded funds (ETF) filings with the US Securities Exchange Commission (SEC), VanEck has filed yet another application. This time, the fund manager has filed for an Ethereum-based ETF that won’t be investing in Ether directly, according to the filing.

The Ethereum Strategy ETF would invest in Ether future contracts, Canada’s approved Ether ETFs, private Ether funds, and exchange-traded products with exposure to the second-largest cryptocurrency, currently hovering around $3,000.

In terms of open interest on CME, Bitcoin futures has $1.62 billion while Ether futures on the regulated platform only has $612.5 million, according to Bybt. Ether futures were listed on CME just six months back, and its OI hit a new ATH just last week at $640 million compared to Bitcoin futures which were listed in December 2017, and its OI peaked at $3.26 billion in February this year.

This move to provide indirect Ether exposure is in line with the several other such applications that followed SEC Chair Gary Gensler hinting at the agency looking favorably upon ETF backed by futures contracts.

Since Gensler’s comments at the Aspen Forum two weeks ago, five such crypto-related futures-based ETF have been filed under the 1940 Act.

This indirect Ether ETF is also filed under the 40 Act, which offers more investor protections than physically-backed ETFs under the 33 Act.

VanEck already has a physically-backed Ether ETF before the SEC, filed earlier in May this year. But the SEC has several such applications filed with them, which are under review, but their fate remains unclear as the securities regulator continues to be cautious with crypto.

The company has also filed for a similar indirect exposure ETF in regards to Bitcoin along with a physically-backed Bitcoin ETF.

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