Ether Futures ETF: A New Direction
Valkyrie, a renowned asset management entity, is knocking on the doors of the US Securities and Exchange Commission (SEC) with its application for an Ether (ETH) futures ETF.
This forward-thinking move is on the heels of Valkyrie’s revisions made to its Bitcoin (BTC) futures ETF, ensuring it resonates with the prevailing regulatory landscape.
Ether: Currency or Digital Commodity?
The application elucidates that Ether’s classification, whether as a currency or a digital commodity, is largely contingent upon its functionality in distinctive transactions. This could mean its potential role as a medium for exchange or a unit that holds account.
Despite Ether’s recognition and acceptance by a few retailers in the domestic and international marketplaces, its adoption for business and retail operations remains reasonably limited. Furthermore, the paperwork also highlights Ether’s capacity as a repository of value and its inherent price fluctuations.
Asset Allocation within the ETF
While a considerable chunk of the ETF will be devoted to Ether futures, the residual assets will find their place in cash, equivalents of cash, and prime securities. The latter consists of entities such as U.S. government-issued bonds, notes, bills, corporate debt securities, and money market funds.
Also, adhering to the stipulations set by the Chicago Mercantile Exchange, the ETF’s investment in Ether futures contracts will be limited to 8,000 contracts each month.
For those new to the concept, these contracts are essentially pre-defined pacts to either procure or liquidate an asset at a specific price in the future. If given the green light, investors can look forward to predicting upcoming Ether prices via this ETF platform.
The Bigger Picture: Other Crypto ETFs
Valkyrie is not limiting its horizons to just Ether ETFs. The firm recently resubmitted its application for a spot Bitcoin ETF to the SEC on July 5.
Giants in the asset management sphere, including BlackRock and Fidelity, are also revisiting the ETF endorsement process. They’ve gone as far as presenting the 19b-4 document, hinting at a partnership with cryptocurrency bigwig, Coinbase, for a surveillance-sharing agreement.
To add to the intrigue, Valkyrie, rooted in Tennessee, lately filed a 497 document, hinting at their ambition to convert $BTF into a two-pronged Bitcoin and Ether ETF by Oct. 3.
With multiple contenders in the fray for the inaugural Bitcoin Spot ETF, the crypto community is eagerly eyeing every new application and amendment, waiting to see who secures the pioneer’s title.