In a landmark development for the crypto market, the first Ethereum Futures ETF in the United States is poised for launch. This comes after years of eager anticipation and stringent regulatory hurdles. VanEck, an asset manager worth $80 billion, has hinted at the imminent launch of its Ethereum Strategy ETF (EFUT). This fund will be actively managed and will primarily focus on futures contracts for Ethereum, the world’s second-largest cryptocurrency.
A Glimpse into the Ethereum Strategy ETF
The EFUT fund will invest in standardised, cash-settled Ethereum futures contracts that are traded on commodity exchanges registered with the Commodity Futures Trading Commission (CFTC). VanEck announced this in a press release. The shares of EFUT will be traded on the Chicago Board Options Exchange (CBOE), although the exact listing date remains undisclosed.
Analysts from Bloomberg ETF, Eric Balchunas and James Seyffart, speculate that a related product could be operational as early as the beginning of October.
Regulatory Hurdles and the SEC
VanEck has been striving to register crypto ETF products in the U.S. for years, but has consistently faced regulatory barriers from the SEC. The SEC has, until now, only been open to allowing Bitcoin futures ETF products, like the VanEck Bitcoin Strategy ETF.
Despite launching in November 2021, this fund has only managed to gather $43.4 million, a stark contrast to ProShares’ holdings which exceed $800 million. ProShares was the first of its kind to hit the market, capturing almost all the market capital over competitors that were launched a few days later.
The Future of Ethereum Futures ETF
With the launch of its Ethereum ETF, VanEck is likely to benefit from a first-mover advantage. It leads a group of fourteen recent proposals submitted to the SEC for a similar product. However, Crypto spot ETFs, backed directly by crypto assets instead of futures contracts, remain unavailable to American investors. Decisions on Bitcoin and Ethereum spot ETFs proposed by VanEck were deferred by the SEC in late August and late September, respectively.
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