Digital Assets: Ethereum Futures ETFs From VanEck, ProShares, Bitwise Open To A Cool Reception
Investors can take positions in ethereum futures ETFs for the first time.
Three prominent U.S. investment management firms, ProShares, VanEck, and Bitwise Asset Management have made a groundbreaking move by introducing the first-ever futures-based exchange-traded funds (ETFs) linked to the value of ether, the world’s second-largest cryptocurrency. This development marks a historic opportunity for investors to engage with exchange-traded products based on ether for the very first time.
However, the debut of these six new funds garnered a somewhat tepid response from investors, with a total trading volume of $1.92 million on their first day. The ProShares Ether Strategy ETF emerged as the largest, with trading valued at just $878,560.
What makes this launch interesting is that it occurred while the U.S. Securities and Exchange Commission (SEC) is still deliberating on whether to approve ETFs tied to the spot prices of bitcoin and potentially other cryptocurrencies like ether. Some experts suggest that the fact these ETFs are tied to futures contracts regulated by the Commodity Futures Trading Commission (CFTC) may have influenced the SEC’s receptiveness.
In contrast, the SEC has consistently rejected all applications for spot bitcoin ETFs, expressing concerns about safeguarding investors from market manipulation.
The six newly introduced funds offer a range of strategies, structures, and costs. The VanEck fund stands out with an expense ratio of 0.66%, potentially leading to lower tax rates on profits due to its C-corporation structure, allowing for dividend distribution over capital gains.
Experts anticipate that fees will play a pivotal role in differentiating these funds, with Roxanna Islam, head of sector and industry research at VettaFi, emphasizing this point.
Additionally, the market anticipates the arrival of more ETFs tied to ether futures, including the re-designed Valkyrie Bitcoin and Ether Strategy ETF, set to commence trading. However, it’s crucial to underline that the launch of an ether futures ETF does not necessarily signify a shift in the SEC’s stance on spot bitcoin ETFs, which still face significant regulatory challenges.
Latest Alternative Investment News
Circle and Nubank (NYSE: NU) have joined forces to broaden access to the digital dollar in Brazil. This collaboration aims to introduce USDC, Circle’s regulated dollar stablecoin, to Nubank’s extensive…
Berlin-based neobroker Trade Republic has secured a full banking license from the European Central Bank, marking a significant milestone for the fintech. This license empowers Trade Republic to both hold…
HUGO BOSS has reinforced its commitment to sustainability by becoming the inaugural investor in Collateral Good Ventures Fashion I, a climate-centric venture capital fund aimed at expediting sustainability initiatives in…
Elon Musk’s artificial intelligence startup, xAI, aims to secure $1 billion in equity financing to compete with industry leaders such as OpenAI, Microsoft, and Google. The company, co-founded by Musk,…