Valkyrie Taps Into Ethereum Momentum With New ETF Filing
August 18 2023 - 10:30AM
NEWSBTC
In a filing dated August 4, Valkyrie applied to add an Ethereum
futures ETF to its Bitcoin Strategy ETF (BTF). However, it would
seem this move was pushed back by the SEC as the asset manager has
now filed a separate application to offer an Ether futures
ETF. Valkyrie Moves To Offer Ethereum Futures ETF In an
application dated August 16, Valkyrie seeks the United States
Securities and Exchange Commission’s (SEC) approval to offer an
Ethereum futures exchange-traded fund (ETF). If approved, the
fund will not directly invest in Ether. Instead, it will focus on
purchasing several ether futures contracts to match the total value
of the ether underlying the futures contracts with the net assets
of the fund. Related Reading: Post-Hack Shenanigans: Curve
(CRV) To Launch On TRON Following $2 Million Investment While this
fund is relatively similar to the Bitcoin futures ETF, which has
existed since 2021, it differs from the Spot Bitcoin ETF, which
prominent institutional firms have filed for. Spot ETFs track the
crypto asset’s price, while futures ETFs focus on the asset’s
future contracts. Valkyrie categorically noted this fact as
part of its application and stated that investors looking to invest
in the price of ether directly should consider investments other
than this particular fund. The application also highlighted the
risks involved in investing in this fund as, according to Valkyrie,
“the Fund’s investments could decline rapidly, including to zero.”
As such, investors should understand that they could lose their
entire investment. As is common with applications such as
this, applicants must prove to the SEC that the underlying asset
has a regulated market of significant size. And Valkyrie’s filing
stated that its fund would be guided by the futures contracts
traded on the Chicago Mercantile Exchange (CME). ETH price
recovers to $1,685 | Source: ETHUSD on TradingView.com No First
Mover Advantage? Valkyrie failed to clarify the status of its
initial filing in its most recent application. The asset manager
had previously tried to add ETH futures contracts to its Valkyrie
Bitcoin Strategy ETF (BTF) in a bid to gain a first-mover advantage
over other applicants. Several other asset managers,
including Bitwise, ProShares, Grayscale, and Volatility Shares,
have also applied to offer an Ethereum futures ETF. However, it
remains uncertain in what order the SEC is likely to approve (if it
does) these applications, especially with this recent
development. Related Reading: Ledger Users Can Now Buy Crypto
Directly Using PayPal Just like Cathie Wood has suggested regarding
the pending Spot Bitcoin ETF applications, the SEC can approve
multiple applications at once, which will likely eliminate the
first mover advantage, or it can decide to approve them in the
order in which these applications came in. Despite
expectations that the regulator will approve an Ether ETF this
year, the probability of the SEC approving any of these
applications remains uncertain as optimism dwindles. Featured
image from iStock, chart from TradingView.com
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