SEC Expected to Approve Ethereum Futures ETFs by October: Report

With at least a dozen Ethereum futures ETF applications already submitted, this October could be a big one for the markets.

Andrew Asmakov

Your Web3 Gaming Power-Up

Enjoy exclusive benefits with the GG Membership Pass

Decrypt’s Art, Fashion, and Entertainment Hub.

Discover SCENE

The U.S. Securities and Exchange Commission (SEC) is reportedly set to greenlight Ethereum futures exchange-traded funds (ETFs) in the coming months.

According to a Bloomberg report, which cites anonymous sources familiar with the matter, the regulator is not expected to block the applications of around twelve companies, including ProShares, Volatility Shares, Bitwise, and Valkyrie, that have recently applied to launch Ethereum futures ETFs.

Such an ETF would track the price of Ethereum futures that are traded on the Chicago Mercantile Exchange, rather than direct spot exposure to the digital asset.

While it is not clear which specific ETF applications will be approved, officials have reportedly indicated that some of the filings could receive approval as early as October. Valkyrie, Proshares, BitWise, Volatility Shares, and the SEC did not immediately respond to Decrypt's request for comment.

Over a dozen applications for Ethereum futures ETFs hit the SEC’s door in recent weeks, with the Valkyrie’s dual Bitcoin and Ether Strategy ETF, which is a proposed conversion of the financial services firm’s existing Valkyrie Bitcoin Strategy ETF, being first in the line for a possible launch as early as on or around October 3.

Earlier this week, Valkyrie also filed for its Ethereum Strategy ETF, however, the first “pure” Ethereum futures ETF sponsored by Volatility Shares could go live around October 11.

ETF analyst Eric Balchunas has meanwhile commented he was not surprised by the SEC's expected move to approve Ethereum futures ETFs.

“This not surprising to us, we had said they would approve Ether Futures early on in race. Nice to be validated. Now what does it mean for spot? Hard to say beyond it shows that their views, policy, and tolerance can change,” wrote Balchunas.

This not surprising to us, we had said they would approve Ether Futures early on in race. Nice to be validated. Now what does it mean for spot? Hard to say beyond it shows that their views/policy/tolerance can change. https://t.co/JXCxNUpj2U

— Eric Balchunas (@EricBalchunas) August 17, 2023

The SEC has thus far declined to approve any spot crypto ETFs. However, there has been a notable shift in the regulator's approach in late 2021, when the SEC greenlit several Bitcoin futures funds that invest in contracts trading on the Chicago Mercantile Exchange (CME).

Bloomberg analyst James Seyffart also pointed to Roundhill, which is also on the list of Ethereum futures ETF hopefuls, disclosing a 0.19% management fee for their proposed fund.

“This is very low compared to BTC futures ETFs like Proshares' $BITO's 0.95%. And is still drastically lower than VanEck's $XBTF which at 0.76%. Fee war already starting in crypto ETFs,” wrote Seyffart.

UPDATE: @roundhill discloses a 0.19% management fee for their Ethereum Futures ETF ( $ETHX).

This is very low compared to BTC futures ETFs like Proshares' $BITO's 0.95%. And is still drastically lower than VanEck's $XBTF which at 0.76%. Fee war already starting in crypto ETFs https://t.co/toBBGkPpZd pic.twitter.com/5Fk34F2qAN

— James Seyffart (@JSeyff) August 18, 2023

Despite the positive news of the potential approval of Ethereum futures ETFs, the world’s second-largest cryptocurrency last night experienced a significant price drop to its lowest levels since mid-June.

Amid the latest market sell-off, which also saw Bitcoin (BTC) plunge below $26,000, ETH dropped to as low as $1,576 before recovering to $26,533 at the time of writing.

Despite the recovery, Ethereum remains down 7% on the day, according to CoinGecko.