The Rise of Ethereum Futures ETF Applications

The Rise of Ethereum Futures ETF Applications

In recent months, there has been increasing excitement in the cryptocurrency market surrounding Bitcoin spot ETF applications. However, what many may not be aware of is the growing number of Ethereum futures ETF applications that are closely following in its footsteps. As of August 10, there are a total of 14 Ethereum futures ETF applications awaiting evaluation by the U.S. Securities and Exchange Commission (SEC). This number surpasses the 9 Bitcoin spot ETF applications currently in the federal register.

Reports of the SEC’s readiness to accept an Ether futures ETF have fueled this influx of applications. According to inside sources, certain companies were contacted by SEC staff who expressed their willingness to review the applications. Encouraged by this, some companies decided to refile their applications, even though they were initially advised that Ether was not yet mature enough to receive approval. The SEC’s mixed messaging has left many perplexed, with one general counsel referring to it as “schizophrenic.”

The SEC’s recent confused messaging can be traced back to the listing of a leveraged Bitcoin futures ETF by Volatility Shares in late June. This move garnered criticism from the crypto investment community, as it seemed to highlight the SEC’s hypocrisy in denying less risky crypto spot ETF products. Although the SEC requested Volatility Shares to withdraw its application, the company declined as its product already fit within an established framework and did not explicitly require the SEC’s approval.

In response, Volatility Shares proceeded to file for an Ether futures ETF on July 28, disregarding the SEC’s request once again. This action prompted the SEC to inform other applicants of its readiness to review their proposals. While this may indicate a shift in the SEC’s stance, it has left many applicants uncertain of the outcome and the likelihood of approval.

Despite the uncertain regulatory landscape, Bloomberg ETF analysts James Seyffart and Eric Balcunas have expressed a positive outlook on the approval of an Ether futures ETF. They assign a 75% likelihood of approval by the end of this year, which is higher than their 65% likelihood assigned to a Bitcoin spot ETF.

The potential approval of an Ether futures ETF could have significant implications for the crypto market. It would bring increased institutional adoption and potentially attract more investors to Ethereum, which is already the second-largest cryptocurrency by market capitalization. Additionally, the availability of an ETF would provide a more accessible investment avenue for retail investors, further fueling the growth of the Ethereum ecosystem.

While the focus has primarily been on Bitcoin spot ETF applications, the rise of Ethereum futures ETF applications cannot be overlooked. Despite the SEC’s confused messaging and mixed signals, applicants remain optimistic about the potential approval of an Ether futures ETF. If approved, it could mark a significant milestone for the Ethereum ecosystem and the broader crypto market as a whole. Investors and enthusiasts will be eagerly awaiting the SEC’s decision in the coming months.


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