- ProShares files an S-1 registration, advancing efforts to launch an Ethereum ETF amid fluctuating market conditions.
- Coinbase Credit to provide trade credit, enabling ProShares to manage transactions beyond their immediate trading balance.
ProShares, a recognized ETF issuer, has formally progressed in its efforts to launch a dedicated Ethereum ETF by filing an S-1 registration statement with the regulatory bodies. This move by ProShares coincides with a period of declining prices in the Ethereum market.
Key Developments and Partnerships
The S-1 filing indicates that ProShares is preparing to establish an Ethereum ETF, which includes engaging Coinbase Credit to provide a line of trade credit. This arrangement will allow ProShares to manage transactions that exceed their available trading funds by borrowing Ethereum and cash.
Eth ETF Update: @ProShares Trust III #Ethereum Spot ETF S-1 Application filed with @SECGov yesterday.https://t.co/ffEB1eg1sl pic.twitter.com/gcmzAVmYjR
— MartyParty (@martypartymusic) June 12, 2024
Additionally, the Bank of New York Mellon (BNY Mellon) will manage the processing of purchases and redemptions of the ETF shares, effectively tracking the ownership within the fund.
BNY Mellon will also take on the roles of administrator and cash custodian for the ETF, ensuring the proper administration and safety of the fund’s cash reserves. Coinbase Custody is tasked with the safekeeping of the Ethereum assets, maintaining the security and integrity of the digital assets involved.
The setup introduced by ProShares includes provisions for future adjustments. BNY Mellon’s initial administrator contract extends for two years, subject to annual renewal, with ProShares retaining the ability to revise these terms or change service providers.
Similarly, the arrangement allows for changes to the custodians of both Ethereum and cash, and to the primary execution agencies. Coinbase can also withdraw from its role as cash custodian.
Ethereum’s Market Position
Despite the active steps taken by ProShares and other financial institutions to integrate Ethereum into conventional financial products, Ethereum’s market performance remains subdued.
At the time of writing, Ethereum’s price has fallen to $3,497.81, positioning itself just below the $3,500 threshold.
Gary Gensler says Ethereum Spot ETFs likely to receive approval by "Some time" at the of summer at Congressional Hearing 🇺🇸☝️#Ethereum #ETF $ETH pic.twitter.com/lAJ0ZdtPGY
— MartyParty (@martypartymusic) June 13, 2024
While Ethereum exhibited a promising increase in value with higher peaks and troughs since May 19th, signaling a potential uptrend, recent developments have seen a reversal of this pattern.
The network growth for Ethereum, a metric indicating the rate of new participant engagement, has also seen a reduction. This trend suggests a decrease in new user interest in Ethereum during this period.
In summary, while ProShares is poised to potentially introduce a financial product linking traditional investment mechanisms with the cryptocurrency sector, Ethereum is concurrently navigating through lower market valuations and reduced growth in network participation.
