Invesco and Galaxy Digital have made a joint effort to introduce an Ethereum exchange-traded fund (ETF) as part of the growing interest in digital asset products by asset managers. According to James Seyffart, an ETF analyst at Bloomberg, the two asset managers have filed for a spot Ether ETF, known as Invesco Galaxy Ethereum ETF.
Details of the ETF
The Invesco Galaxy Ethereum ETF aims to reflect the performance of the spot price of ether by holding units of the cryptocurrency with a separate custodian. The identity of the custodian has not yet been disclosed. Invesco acts as the sponsor, while Galaxy Digital serves as the “execution agent” responsible for selling ETH to cover the Trust’s expenses.
Increasing Interest in Ethereum ETFs
Invesco and Galaxy Digital join a growing list of investment managers seeking regulatory approval for spot ETH ETFs. The SEC has recently extended the deadline for decisions on previous applications from ARK 21Shares and VanEck. The commission stated that it needed more time to consider the proposed rule change and related issues.
While a spot Ether ETF may take time to materialize, futures-based Ether ETFs are expected to be available soon. Investment firms have already begun preparing to include ETH futures vehicles in their portfolios. For example, VanEck has announced its upcoming Ethereum Strategy ETF (EFUT) to be listed on the Chicago Board Options Exchange. Valkyrie plans to offer exposure to Ether futures through its existing Bitcoin Strategy ETF, now rebranded as the Valkyrie Bitcoin and Ether Strategy ETF. Bitwise has also submitted an updated prospectus for their equal-weight Bitcoin and Ether futures ETF.
Potential Approval for Futures ETFs
The SEC has yet to approve spot Bitcoin ETF applications due to concerns over market manipulation and investor vulnerability. However, there is a higher likelihood of approval for futures ETH ETFs. These ETFs would directly invest in futures contracts traded on the Chicago Mercantile Exchange (CME), making it easier for the regulatory body to monitor and protect against price manipulation.
Reports indicate that the SEC may start approving Ether futures ETFs in early October, which has generated significant interest among asset managers eager to participate. The positive trading of Ether, currently valued around $1,600, is driven by the enthusiasm surrounding the introduction of futures ETFs.
