SEC Approves Ethereum Futures ETFS
The United States Securities and Exchange Commission (SEC) is likely to approve several Ether ETFs within the next three months.
The approval of ETH ETFs will likely increase the Flow of institutional capital in Ethereum.
There is still uncertainty on the Ethereum ETFs the SEC may approve.
Keywords: Ethereum Futures ETFs, Ether futures, Exchange Traded Funds, Ethereum ETFs, buy futures on Ethereum, trade ETH futures
Introduction
The crypto market is waiting for a catalyst to trigger a strong bullish momentum. The prices of most cryptocurrencies were depressed during the first half of this year despite showing bullish momentum from time to time. Also, the collapse of United States crypto friendly banks like Silicon Valley Bank dampened the investor interest in crypto assets.
Of course, the United States crackdown on the crypto sector made the situation more dire. Right now, crypto enthusiasts believe that the approval of crypto exchange traded funds (ETFs) would be the required catalyst to generate renewed momentum in the sector. This article will discuss the likely effects of the approval of Ethereum futures ETFs on the crypto market.
SEC Nears Approval of Ethereum Futures ETFs
The United States Securities and Exchange Commission (SEC) is likely to approve ETH exchange traded funds (ETFs) within the next few months, a development that may create more interest in the crypto sector.
According to a Bloomberg report, which has cited an undisclosed source, a number of asset management firms may soon get approval to launch their Ethereum ETFS this year. The source hinted that the SEC is likely to approve several Ether Futures ETFs by October this year.
According to the report, it is highly unlikely that the SEC will hinder the approval of the Ether futures ETFs. It stated, “The regulator isn’t likely to block the products, which would be based on futures contracts for the second-largest cryptocurrency, according to people familiar with the matter.”
Also, the report added that there is pending regulatory approval for at least 5 Ether-Futures filings. Currently, more than a dozen investment companies have filed their applications for ETH traded exchange funds.
Read also: Why Do People Choose Crypto ETFs? What Are the Advantages And Disadvantages?
Uncertainty Surrounds the Approval of Ethereum ETFs
As said above, close to a dozen companies have applied to launch their Ether Futures ETFs. Nevertheless, the SEC has not given an indication of the firms whose applications it will approve.
ProShares Short Ether Strategy ETF, Bitwise Ethereum Strategy ETF, Roundhill Ether Strategy ETF, VanEck’s Ethereum Strategy ETF, Roundhill Ether Strategy ETF, and the Grayscale Ethereum Futures ETF are examples of Ether futures ETFs that await the SEC’s approval.
As you note, Volatility Shares, Bitwise, Valkyrie, Roundhill, and ProShares are a few of the companies that have applied for the ETH ETFs. Nonetheless, we still await to see which of these firms’ ETH ETFs the SEC will approve.
The cited sources said, “It couldn’t immediately be determined which funds would get green lights. Officials have indicated that several might be approved by October.”
Read also: What are Leveraged ETF Tokens?
In general, exchange traded funds are investment assets that give investors exposure to underlying assets without owning them. People can trade ETFs on stock exchanges like Chicago Mercantile Exchange (CME).
The SEC’s approval of Ether futures ETFs would mean that investors will have a new way of investing in cryptocurrencies which will likely attract more institutional capital into the sector.
The approval of ETH futures ETFs would also mean that individuals and institutional investors will be able to buy futures on Ethereum within a few months. This will give them the room to trade ETH futures which may lead to more acceptance of Ethereum products.
Will SEC Also Approve BTC ETFs?
The news of the SEC’s possible approval of ETH ETFs comes a few months after several financial asset management companies like BlackRock have applied for bitcoin ETFs. So far, there has been no indication that the SEC may approve Bitcoin ETFS. Instead, the SEC seems to have reservations against them.
According to the information released in June, several BTC fillings have failed to meet SEC’s requirements in terms of transparency and details. The US government agency said that the documents were not “clear and comprehensive.” However, Cathie Wood, The CEO of Ark Invest, believes that the SEC will not approve BTC ETFs individually. She thinks that, “If the SEC is going to approve a Bitcoin ETF, it will approve more than one at once.”
Implications of SEC’s Approval of Ether Futures ETFs
If the SEC approves Ethereum ETFs it will be a key milestone for the cryptocurrency sector. It will show a shift of the SEC’s perspective on digital assets and will indicate the traditional finance sector’s increased acceptance of cryptocurrencies and other digital assets.
The approval of ETH ETFs would also help to clear the dividing line between crypto securities and non-securities. Adam Cochran, a crypto analyst, thinks that by approving ETH ETFs the SEC would have indirectly acknowledged that ETH is not a security. As such, it would imply that Ethereum should not be regulated as a traditional financial security based on its purpose, usage and consensus mechanism.
Similarly, that development would set a precedent that is important to the crypto sector. It will become a point of reference in the SEC future litigations against other similar cryptocurrencies it deems to be securities. However, this will not imply that all cryptocurrencies are non-securities.
The approval would also mean that the SEC accepts ETH as a currency or commodity regardless of its past concerns pertaining to its initial coin offering. However, it would result in criticisms from people who view ETH as a security. They may also argue that there is regulatory favoritism towards Ethereum.
Read also: The Wild West of the Crypto World? Reasons Behind the U.S. SEC’s Lawsuits
Implications of News of Possible Approval of ETH ETFS on Ethereum Price
The market has received the news of a possible approval of several ETH ETFs favorably as reflected in the recent Ethereum price surge. On 17 August Bloomberg reported that the price of ETH rose by 11% to $1,700 following the news of The SEC’s potential approval of ETH Futures ETFs. This also indicates that ETH may become bullish if the SEC approves Ether ETFs.
As normal, the effect of trending news on the price of a specific cryptocurrency does not last for a long period. This is because the ETH price has dropped from $1,700 and is now ranging between $1,643 and $1,652 as the following chart shows.
ETH’s 14-day Price Movement - CoinGecko
As The Graph shows, ETH price has been ranging between $1,600 and $1,652 since 17 August. Currently, the price is very neutral.
Conclusion
The crypto market anticipates that The United States Securities and Exchange Commission (SEC) will approve several ETH ETFs within the next three months. Such an approval may endorse that ETH is a non-security but is either a currency or a commodity. The approval of ETH ETFs is likely to create bullish momentum in the market.
FAQs on Ether Futures ETFs
Is there an ETF that holds Ethereum?
Currently, there are no approved Ethereum futures ETFs on the market. The United States Securities and Exchange Commission (SEC) is likely to approve ETH ETFs by October 2023.
Can you buy futures on ETH?
There are several platforms that offer Ethereum futures. You can buy Ether futures on Binance exchange, Chicago Mercantile Exchange and Gate.io centralized crypto exchange.
Where to trade Ethereum futures?
Investors SafeMoon price on various platforms which include Binance exchange, Chicago Mercantile Exchange and Gate.io centralized crypto exchange. Ethereum futures are investment instruments that track the value of Ether (ETH).
What is the symbol for ETH futures?
The ticker for Ethereum Futures is ETH. Investors can trade Ether futures on Gate.io exchange, Binance exchange and Chicago Mercantile Exchange, among others.
