- Valkyrie files with the U.S. SEC for an Ethereum Strategy ETF focusing on ether futures and related assets.
- Despite previous rejections of spot bitcoin ETFs by the SEC, ETFs tracking bitcoin futures have gained approval since October 2021.
An Evolution in Ethereum Investments
In a pivotal move towards diversifying cryptocurrency investments, Valkyrie, a prominent asset manager, has submitted its proposal for an Ethereum Strategy Exchange-Traded Fund (ETF) to the U.S. Securities and Exchange Commission (SEC). This ETF won’t be solely centered on Ethereum; instead, it will focus on investments in ether futures and other associated assets.
Cryptocurrencies experienced a tumultuous 2022, but the storm appears to be settling. Major players in the asset management realm, including industry giant BlackRock, are demonstrating renewed interest in these digital assets. Their current strategy seems to be geared towards unveiling a series of derivative-based products, and ETFs are at the forefront of this wave. For those new to the blockchain realm, an ETF, or Exchange-Traded Fund, is a type of security that tracks an index, sector, commodity, or other assets, which can include cryptocurrency futures in this context.
The cryptocurrency community witnessed a landmark moment in October 2021 when the SEC granted approval for ETFs designed to track the price dynamics of bitcoin futures contracts. This monumental decision was heralded as a turning point for the world of decentralized digital currencies, offering them a stamp of legitimacy in the eyes of traditional finance.
However, it’s essential to note the distinction between the types of ETFs in question here. While futures-based ETFs have found favor with regulators, spot bitcoin ETFs haven’t shared the same fortune. A ‘spot’ in financial markets refers to the current market price of an asset for immediate delivery and settlement. The SEC has raised concerns regarding these spot bitcoin ETFs, primarily driven by apprehensions over the trading surveillance of these assets. The underlying spot market, the SEC contends, may be vulnerable to fraudulent activities and potential manipulation, thereby affecting the integrity of the investments.
While Valkyrie’s move into the Ethereum space is indeed commendable and noteworthy, the ball now lies in the SEC’s court. The crypto community, investors, and other stakeholders will be keenly awaiting the regulator’s decision, which could further shape the trajectory of Ethereum and the broader cryptocurrency market.
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