Cryptocurrency RegulationETF (Exchange Traded Fund)Ethereum (ETH)

Bloomberg Predicts SEC to Grant Ethereum Futures ETFs Approval

A Friday, August 18 publication by Bloomberg predicted that the US Securities and Exchange Commission (SEC) would relent from its dismissive stance to approve Ethereum futures exchange-traded funds (ETFs). The report acknowledges that the Garry Gensler-led SEC is reviewing several Ethereum futures ETF applications estimated at several dozen.

The report adds that October could become the turning point as the securities watchdog would reportedly greenlight Ethereum futures ETF

SEC Reviewing Dozen Applications of Ethereum Future ETFs

The report cites confessions by anonymous sources privy to the pending applications that Gensler-chaired SEC would unlikely dismiss the applications approximating twelve companies. The publication identifies Bitwise, Valkyrie, Volatility Shares, and ProShares as the entities seeking approval for Ethereum futures ETFs. 

The ETF involves a derivative from tracking the Ethereum futures price as they trade on the Chicago Mercantile Exchange (CME). Approval of the Ethereum futures ETF would offer investors alternative exposure to the direct spot exposure to the second-ranked digital asset by market capitalization. 

Will SEC Approve Ether ETF Applications by October? 

Although the date for approving the ETF applications remains anonymous, officials are projecting to have SEC’s greenlight granted by October. Attempts to reach the spokespersons from Valkyrie, BitWise, SEC, and Volatility Shares received no immediate response to the request. 

A review of the dozen applications seeking greenlight to run the Ethereum futures ETFs shows the Valkyries Bitcoin and Ether Strategy ETF in the list. It involves a unique design that proposes the conversion of the Valkyrie Bitcoin Strategy ETF at the top of the likely approval list. The ETF’s team slates it for approval by October.

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Valkyrie reported on Wednesday, August 16, filing for the Ethereum Strategy ETF as a pure product. It indicated that the Ethereum futures ETF is drawing sponsorship from the Volatility Shares likely to go live by October 11. 

Analysts Ruleout SEC Dismissing Ether Futures Applications

ETF analyst Eric Balchunas acknowledges the anticipated approval of the Ethereum futures ETFs by October as normal. He indicated that the ETFs advocates were validated to indicate that the SEC is unlikely to dismiss the applications for Ether Futures. 

Balchunas observed calmness on the impact of Ethereum futures ETFs on spot price levels. He admitted that it is early to advance any views on the spot, considering that tolerance levels can change. 

The SEC has, through explanations, dismissed to approve of spot crypto ETFs citing vulnerability to price manipulation. Nonetheless, SEC portrays a notable departure in its approach since late 2021 when it began approving Bitcoin futures funds. The approved funds target contracts trading within the Chicago Mercantile Exchange (CME).

Ethereum Futures ETF Set to Witness Fierce Management Fee War

Bloomberg analyst James Seyffart acknowledged that the approval of several, if not all, bids for the Ethereum futures ETF is set to trigger fierce competition. The respective entities would likely impose different management fees on the proposed fund. 

Seyffart observed that Roundhill, among the list of applications for Ethereum futures ETF anticipating approval, indicates a 0.19% management fee. He notes that the disclosed fee is the lowest charge compared to BTC futures ETFs. In particular, Prosahres $BITO sets the fee at 0.95% while VanEck’s $XBTF is 0.76%. The emergence of such a range shows that fee war is shaping into fierce competition.

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Ethereum Price Shows Mild Reaction to Futures ETF Approval

The crypto commentators observe that the positive development anticipated in Ethereum futures ETFs hardly triggers a reaction to the Ethereum price. Although Ethereum has witnessed declined volatility similar to Bitcoin, its price suffered a price drop to lower levels since the mid-June rally. 

With Bitcoin (BTC) plunging below $26000, Ethereum suffered a similar drop to exchange hands in a range of around $1570. The recovery in both tokens has been mild, leaving Bitcoin at $26100 and Ethereum at $1667, as per CoinGecko data. 

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Stephen Causby

Stephen Causby is an experienced crypto journalist who writes for Tokenhell. He is passionate for coverage in crypto news, blockchain, DeFi, and NFT.

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