Approval Granted for First-Ever Ethereum Futures ETF by Valkyrie Investments
Nashville-based asset management firm, Valkyrie Investments, has received approval from the U.S. Securities and Exchange Commission (SEC) to launch the world’s first exchange-traded fund (ETF) for Ethereum futures. This significant milestone for digital asset investment in the United States underscores the SEC’s growing acceptance of the crypto market.
The SEC Embracing the Crypto Market
The SEC’s decision to allow the trading of Bitcoin ETFs based on futures contracts in October 2021 paved the way for Valkyrie Investments and other firms to explore the potential of crypto-related ETFs. While Valkyrie Investments has already established a Bitcoin Mining ETF, it is now part of a select group looking to offer Ethereum futures ETFs. Other key players, such as VanEck, Grayscale Investments, and Bitwise, have also filed applications with the SEC in pursuit of Ethereum futures ETFs. Ethereum’s position as the world’s second-largest digital asset has contributed to the growing demand for such investment products.
Spot Bitcoin ETFs on the Horizon
Valkyrie Investments, in collaboration with leading Wall Street firms like BlackRock and Fidelity, is also exploring the possibility of introducing a spot Bitcoin ETF. This type of ETF would enable a broader range of investors to access Bitcoin’s spot price, as opposed to its future value, which is currently only available to accredited investors. Despite the interest, the SEC has been hesitant to approve spot Bitcoin ETFs due to regulatory concerns.
Interestingly, Valkyrie had initially planned to launch its fund on October 3. However, the potential U.S. government shutdown prompted the SEC to expedite the approval process for Ethereum futures ETFs. Should Congress fail to secure funding, the government could face operational disruptions, including the potential disruption of SEC activities. In light of this, Valkyrie’s Chief Investment Officer, Steven McClurg, expressed his satisfaction with the SEC’s decision, stating, “We are thrilled to be the first to offer ether futures to our investors as interest in the asset has grown exponentially over the past year.”
Valkyrie Investments intends to merge its existing Bitcoin futures ETF with the new Ethereum futures ETF. Trading for the combined fund is set to begin today.
The SEC’s accelerated approval timeline, coupled with its recent delay in decisions regarding spot Bitcoin ETF applications from firms like Ark 21Shares owned by Cathie Wood, suggests the agency’s commitment to maintaining market stability in the event of a government shutdown. SEC Chairman Gary Gensler has even urged companies planning to go public to expedite their efforts, highlighting the potential impact a government shutdown could have on the agency’s ability to oversee markets and public offerings.
Overall, the SEC’s approval of Valkyrie Investments’ Ethereum futures ETF marks another step toward the maturation of the U.S. crypto market. While the SEC exercises caution, especially with spot ETFs, it continues to demonstrate a willingness to accommodate futures-based investment products. With other firms preparing to enter the Ether ETF market, competition in this space is expected to intensify.
