Suddenly, the cryptocurrency market, which was in a summery sluggish mood, following Bitcoin’s months-long volatility, sprang to life like a jolt of electricity.
All this came as a result of the anticipation surrounding the decision of the U.S. Securities and Exchange Commission (SEC) regarding the approval or rejection of applications for Bitcoin spot exchange-traded funds (ETFs).
Surprisingly, within 24 hours, six applications were filed for Ethereum ETFs, preceded by another application submitted the previous week.
However, these ETFs were not for the spot market but based on Ethereum futures, which are traded on the Chicago Mercantile Exchange (CME) and regulated by the Commodity Futures Trading Commission (CFTC).
Therefore, these ETFs track the futures contracts of the second-largest cryptocurrency and do not require direct ownership of the underlying asset.
It all started with the application from Volatility Shares on July 28th, a company managing $170 million in assets. The proposed strategy of their ETF (ETHU) involves investing up to 25% of their assets in Ethereum futures contracts settled in cash and traded on the CME. Additionally, they may invest in other investment company securities but not directly in Ethereum.
Initially, Volatility Shares’ application didn’t make much of a splash as they are considered a small player in the U.S. market. However, things took a turn when big players entered the scene on August 1st.
Bitwise, which had previously withdrawn its initial application submitted in May, proceeded with a new application for the Ethereum Strategy ETF (ETHG). According to the filing, ETHG intends to invest in Ethereum futures contracts without seeking direct exposure to the current spot price of Ethereum.
The amount invested in futures contracts will not exceed 25% of the total assets at the end of each quarter, with the remaining 75% expected to be invested in U.S. government bonds or similar securities.
Next, Roundhill Investments from New York submitted their application for the Roundhill Ether Strategy ETF. The company manages a total of $660 million across 8 ETFs.
Following them is VanEck with $78 billion in assets under management, which has already filed an application for a Bitcoin ETF. Their proposed ETF aims to have exposure to up to 100% of total assets in Ethereum futures or related instruments.
Proshares, managing $65 billion, filed two different ETF applications focusing on Ethereum: one long and the other short. Investors can choose between the two ETFs based on their market expectations.
Finally, Grayscale Investments joined the participation with the Grayscale Ethereum Futures ETF. Like the others, this is a renewed application, updated with more recent information.
Their goal is to maintain an actively managed fund primarily seeking investment exposure through Ethereum futures contracts, purchased through a subsidiary based in the Cayman Islands.
With all these applications, the market is now eagerly awaiting the SEC’s decision, which could have significant implications for the cryptocurrency space and the growing interest in Ethereum-based investment products.
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