- Volatility Shares to unveil the first Ether Futures ETF in the US on October 12, 2023.
- Ethereum’s journey mimics the surge of Bitcoin in 2021, with speculations about its potential impact on the ETH price.
A New Dawn for Ethereum Investors
The cryptocurrency ecosystem, constantly evolving and throwing surprises, is preparing for another monumental shift. Volatility Shares, a known trailblazer in the ETF world, is all set to pioneer the inaugural Ethereum Futures ETF, Ether Strategy ETF (Ticker: ETHU), in the United States on October 12, 2023.
Decoding the Ethereum Futures ETF Dynamics:
Unlike most ETFs that deal directly with assets, this Ethereum Futures ETF is wrapped around cash-settled Ethereum futures contracts on the CBOE, sidestepping any direct involvement with Ether. As elucidated in the SEC documentation, the ETF’s design is to capitalize on the price dynamics of Ethereum, without the fund investing in the cryptocurrency directly.
Stuart Barton, Volatility Shares’ CIO, seems buoyant about this new venture. Recalling their earlier foray into the crypto ETF space with the 2x Bitcoin-linked ETF (BITX) launch in July, he believes that the ETHU is a progressive stride before moving on to the spot markets.
However, the audacious roadmap set by Volatility Shares did raise eyebrows. Eric Balchunas, a senior ETF Analyst at Bloomberg, commented on this aggressive timeline and juxtaposed it with their previous expedited BITX introduction. While he seems optimistic about the SEC’s approval based on no observable withdrawals, he thinks the firm is pushing boundaries, much like its earlier ventures.
Interestingly, the Ethereum ETF race isn’t a lonely one. Several financial titans, encompassing Bitwise, VanEck, Vakyrie, Roubhill, ProShares, and Grayscale, have presented their aspirations for Ethereum Futures ETFs to the US SEC. Yet, the approval baton hasn’t been passed to any contender so far.
Drawing Parallels with Bitcoin’s Meteoric Rise:
For context, the crypto sphere witnessed the rollout of the first Bitcoin futures ETF in the US by ProShares on October 19, 2021. This move, seen as strategic by many, contributed to the pooling of a whopping $1.3 billion in Bitcoin futures ETFs, with the lion’s share—around $1.1 billion—belonging to ProShares’ Bitcoin Strategy ETF.
The 2021 scenario painted Bitcoin amidst its sensational bull run. Leading up to its futures ETF launch, Bitcoin surged a staggering 60% from October 1 to 19, touching $66,970. But post this, a minor correction phase ensued before it rocketed again to its zenith near $69,000.
While parallels are tempting, the big question looms: Can Ethereum mimic Bitcoin’s 2021 euphoria? The crypto terrain now is somewhat muted, potentially at the cusp of a fresh bull wave. But indisputably, this Ethereum ETF launch holds the promise to act as a potential price catalyst for Ethereum.
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