Global investment manager VanEck files for an Ethereum futures based exchange-traded fund (ETF) on August 18th that will seek to by-pass U.S Securities and Exchange Commission’s (SEC) crypto ETF barrier by trading ether or any other digital asset indirectly.

According to Wednesday’s filing, VanEck’s Ethereum Strategy ETF will be invested in ETH futures contracts, Canada’s approved ether ETFs, private ether funds and “pooled investment vehicles and exchange-traded products that provide exposure to ETH.” But it won’t buy the digital asset itself.

So far VanEck already has filed registration of a pure-play ether ETF. But the products’ (“33 Act” products) fortune remains uncertain and is likely tied to that of over a dozen bitcoin ETF bids that are also before SEC. Till this day, the SEC is holding its decision and yet to approve any ETF that intends to invest directly in cryptocurrencies like Ethereum and Bitcoin.

With VanEck’s “Ethereum Strategy ETF”, Pro shares “Ether Strategy ETF” and Kryptolin’s “Ethereum ETF Trust”, brings the total to 23 crypto ETF filings so far in 2021. President of the ETF Store, Nate Geraci said, “Given most recent messaging from the SEC… it seems highly likely a Bitcoin futures ETF will be approved before an Ether futures product.”

Nevertheless, there is hope that Biden’s newly formed SEC’s Chair Gary Gensler would be more open to accepting ETFs based on crypto futures rather than through direct exposure. Earlier this month, while speaking at the Aspen Security Forum, Gensler said that he “particularly looked forward to” the SEC’s review of “ETFs limited to these CME-traded Bitcoin futures.”

Though Canada has already ratified a trio of Ethereum ETFs from Purpose Investments, Evolve ETFs, and CI Global Asset Management; VanEck’s Ethereum futures ETF would be the first in the United States.

Joyashree Dey

CBW - External Analyst

INDIA