Key facts:
- Grayscale, Proshares and VanEck are some of the applicant companies.
- Analyst mentions that an Ethereum “ETF run” was started.
The fever for exchange-traded funds (ETFs) has reached Ethereum. Within days, six companies filed applications to launch funds based on cryptocurrency ether (ETH) futures with the United States Securities and Exchange Commission (SEC).
The first to request it was the firm Volatility Shares, on July 28. In June, this same company obtained authorization for the issuance of a leveraged bitcoin ETF. Thus, it became the first leveraged investment fund based on digital currency, in the North American country.
The other five companies that submitted the request to the SEC, last Monday, August 1, were: Bitwise, VanEck, Roundhill, ProShares and Grayscale.
ETFs are financial instruments that offer exposure to the price of an asset or cryptocurrency without the need to own or acquire it. It is only traded or speculated on its price.
Some companies could challenge the SEC
Although the SEC has been considering several applications for Ethereum cryptocurrency ETFs over the past few years, none have been approved so far. This is, for example, the case of VanEck who made an ETF request in 2021, a fact reported by The Market Times.
The SEC is now tasked with evaluating the applications and determining whether they meet investor protection and regulatory requirements before granting approval. The decision on the request of Volatility Shares will be known on October 11 and of the rest of the companies on October 16 of this year. It is worth clarifying that the SEC could request an extension of the deadline, if it did not have a decision made by then.
Eric Balchunas, an analyst at Bloomberg, commented that these requests started an Ethereum “ETF race”. The analyst also expressed (although he later deleted that tweet) that the next few days will be “interesting.” In his opinion, there is a possibility that the SEC “will ask them to withdraw (as in the past)”, but it is possible that some of them “will not listen this time, pass the stop sign and defy the SEC.” ».
Enthusiasm for exchange-traded funds appears to be fueled by financial giant BlackRock’s recent application for a Bitcoin spot ETF last June. Following BlackRock’s request, four other companies: Invesco, WisdomTree, Valkyrie, and Bitwise (listed as an applicant for one of the Ethereum ETFs), have also formally submitted their registration for the creation of a bitcoin ETF.
