In the past week, the U.S. Securities and Exchange Commission (SEC) has been inundated with applications for Ether-based exchange-traded funds (ETFs). The latest to join the fray is ProShares, a prominent player in the ETF market.
As reported by various sources, ProShares has filed, on August 3rd, an application for an equal weight Bitcoin and Ether ETF, making it the 11th Ether-related filing within a week.
The proposed ETF by ProShares aims to provide investors exposure to both Bitcoin and Ether, two of the biggest cryptocurrencies by market capitalization.
According to the filing details, the ETF does not intend to hold cryptocurrencies directly. Instead, it plans to gain exposure to these digital assets via futures contracts and potentially other financial instruments, including pooled investment vehicles.
UPDATE: Another one…. 11 ETFs Filed… Proshares filed for a 4th ETF with Ethereum futures. This one is an equal weight #Bitcoin & #Ethereum ETF just like Bitwise’s filing which dropped an hour ago. https://t.co/vB05Wvt33e pic.twitter.com/u3I3LzznGZ
— James Seyffart (@JSeyff) August 3, 2023
This avalanche of applications was triggered by Volatility Shares, who submitted its Ether Strategy ETF filing on July 28.
Following suit were Bitwise Asset Management, Roundhill Financial, Van Eck, ProShares, and Grayscale Investments, all lodging their Ether futures ETF applications on August 1.
Interestingly, no Ether futures contract tracking ETF has yet been approved by the SEC. In contrast, Bitcoin futures ETFs have been in existence since October 2021.
Should the SEC refrain from denying these applications, the Ether ETFs would make their debut 75 days from their respective submission dates. The earliest to launch, given the green light, would be the Volatility Shares ETF on October 12.
Futures ETFs, the focus of these filings, differ from spot ETF products in their underlying function. While futures ETFs track the price of futures contracts, spot ETFs necessitate the purchase of the underlying asset by the issuer. Consequently, spot ETFs generally enjoy more credibility as they involve the fund manager actually buying and holding the underlying asset.
This surge of Ether futures ETF applications appears to be a ripple effect of a recent storm of filings from major asset management firms eyeing the launch of spot Bitcoin ETFs. Among these is the world’s largest asset manager, BlackRock, striving to introduce what could be the inaugural spot Bitcoin ETF in the United States.
An approval from the SEC could potentially open doors for mainstream investors to gain exposure to Bitcoin and Ethereum without the need to hold the cryptocurrencies directly.
