SEC Nears Approval for Ether-Futures ETFs in Positive Turn for Crypto Industry

From an exclusive source, the U.S. The Securities and Exchange Commission (SEC) is on the verge of granting approval for the launch of the first exchange-traded funds (ETFs) based on Ether futures.

This progress marks a significant victory for multiple companies that have long aspired to introduce these products into the market.

According to sources familiar with the matter, the SEC is unlikely to impede the launch of ETFs based on futures contracts for the second-largest cryptocurrency, Ether.

Notably, around twelve firms, including notable names like Volatility Shares, Bitwise, Roundhill, and ProShares, have submitted filings to establish these ETFs.

While the specific ETFs that will receive the green light are yet to be confirmed, officials have hinted that several might gain approval by October. These insights were shared by individuals who requested anonymity due to the confidential nature of the information. The SEC, however, refrained from providing any comments regarding this information.

It’s worth noting that while the SEC has been hesitant to approve an ETF directly tied to a cryptocurrency, it previously allowed the trading of a fund that involves Bitcoin futures contracts on the Chicago Mercantile Exchange. There has been growing speculation that an ETF involving Ether futures, which are also traded on the CME, would be the next logical step.

Gradual Progress: The ETF Approval Journey for Ether Derivatives

Despite the buzz, the approval process for an ETF involving derivatives of the second-largest cryptocurrency, Ether, has been gradual. As of now, Bitcoin commands a market value of approximately $514 billion, while Ether’s market value is around $201 billion, according to CoinMarketCap data.

Meanwhile, the SEC is still entangled in a legal dispute with the crypto industry regarding its resistance to ETFs based on Bitcoin itself. A panel of judges from a U.S. federal appellate court is set to make a crucial decision in a lawsuit filed by Grayscale Investments LLC challenging the SEC’s rejection of an application to convert its Bitcoin trust into an ETF.

The SEC’s apprehensions primarily revolve around potential investor risks within the crypto space. Concerns have been raised about potential price manipulation, inadequate liquidity, and the extreme price volatility witnessed in the market. These concerns have contributed to the cautious approach taken by the SEC in granting ETF approvals.

However, despite these challenges, several firms, including major player BlackRock Inc., have recently submitted applications to list ETFs directly tied to Bitcoin.

BlackRock’s filing in June had a positive impact on Bitcoin’s price, briefly pushing it above $31,000.

While Bitcoin’s price has experienced fluctuations and even a drop of $2000 in the last hour due to speculations about SpaceX soldering its Bitcoins, Ether’s value has seen an approximately 11% decline this month, currently trading around $1,600.

Asset management firm, Valkyrie, has also taken a bold step by submitting an application to the SEC for an Ethereum futures ETF. This application signifies Valkyrie’s intention to expand its investment offerings beyond Bitcoin futures ETFs.

While the proposed ETF would not directly invest in Ether itself, it aims to purchase a range of Ether futures contracts. This move aligns with the growing interest among various asset management giants, including Grayscale, VanEck, and others, to gain approval for Ether futures ETFs tailored for U.S. investors.

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