The US Securities and Exchange Commission (SEC) has lately been flooded with requests for Ethereum ETF Applications, with 11 Ether-based petitions made in less than a week.
ProShares has added another Ethereum exchange-traded fund (ETF) application to the growing list. However, analysts believe that the chances of any of them being authorized by the Securities and Exchange Commission are small.
The most recent ProShares ETF petition was submitted on August 3 and suggests a Bitcoin and Ether ETF with equal weighting. The fund, according to the filing, would monitor “the performance of investors retaining long positions in the closest maturing monthly bitcoin and ether futures contracts.”
Eleven Ethereum ETF Applications Were Received
As reported by Bloomberg Intelligence analyst James Seyffart, this is ProShares’ fourth ETF that includes Ethereum futures. Furthermore, it takes the total number of Ethereum ETP submissions to 11, he announced on August 4.
There have been 11 Ether-related ETF registrations in the previous seven days, all of which have been for prospective ETFs. Volatility Shares launched an upsurge of Ether-based ETF applications on July 28 when it filed for the Volatility Shares Ether Strategy ETF.
UPDATE: Another one…. 11 ETFs Filed… Proshares filed for a 4th ETF with Ethereum futures. This one is an equal weight #Bitcoin & #Ethereum ETF just like Bitwise’s filing which dropped an hour ago. https://t.co/vB05Wvt33e pic.twitter.com/u3I3LzznGZ
— James Seyffart (@JSeyff) August 3, 2023
On August 3, Bitwise applied for a Bitcoin and Ether Equal Weight Strategy ETF. Meanwhile, on August 3, ProShares and Direxion both registered for new ETFs.
Nate Geraci, President of ETF Store, stated on August 4 that he thought demand for ETH futures ETFs to be quite modest overall, before stating:
“BTC futures ETFs have $1.5 billion in AUM, with the majority of that coming in the first few days after launch. Integrated BTC + ETH futures ETFs are the greatest way to prosper right now.”
“Ultimately, traders prefer real-deal spot ETFs,” he said.
Analyst Opinion on Ethereum ETF Applications and ETH Price Forecast
In response to this week’s flood of applications, Seyffart stated,
“My initial expectation is that these will be dropped by the end of next week.” He went on to say that these companies “undoubtedly had these prepared for use on the market and just required us to submit it again.”
We have 7 #Ethereum Futures ETF filings from 6 Issuers. All of them are behind Volatility Shares. Key aspect here is that they are the same firm that managed to get a 2X #Bitcoin Futures ETF ( $BITX) through this SEC. https://t.co/dVpBkmtWwv pic.twitter.com/m615PS8Ssc
— James Seyffart (@JSeyff) August 2, 2023
Companies may believe that the expense of producing an off-the-shelf file and then withdrawing it is insignificant, he added. Specifically when contrasted to the expense of falling behind the competition on a first-of-its-kind launch by days or weeks
“I’d say there’s a 75% chance these are withdrawn according to gut instinct,” he suggested.
Earlier Last Week, Legal Expert Elliott Stein Stated on Bloomberg
“If, as we believe, the SEC drops its case with Grayscale, the line of least resistance would be an upsurge of synchronous permits for all spot Bitcoin ETF petitioners – including Grayscale and the other eight prominent filings.”
Ethereum prices have fallen 2% since Monday this week. At the time of writing, altcoin was down slightly on the day, trading at $1,830. ETH dropped 5.5% in the last month but has been trend limited since mid-March.
About the SEC Case Over ETF
Notably, the Securities and Exchange Commission has never authorized an ETF that follows Ether futures agreements. Bitcoin futures ETFs, on the other hand, have been active since October 2021.
If none of the Ethereum ETF applications are denied by the SEC, the ETFs will be available 75 days after their filing dates, with the Volatility Shares ETF being the first to be live on Oct. 12.
Following a halt in preparations by different possible issuers, the Securities and Exchange Commission’s choice to review ether futures ETF in the last three months has confused some industry observers. The precise grounds for the regulator’s decision remain unknown.
“SEC regulation on crypto ETFs has always been careless,” said Matthew Sigel, VanEck’s head of digital assets research. “Now it is completely ridiculous.”
The SEC’s representative did not instantly respond to a request for comment on Wednesday.
The primary distinction between futures and spot ETF products is that the former monitors the cost of futures contracts, whilst the latter entails the issuer acquiring the underlying asset. Spot ETFs are often seen as more reliable since the fund management purchases and holds the underlying asset.
Closing Thoughts
The wave of Ethereum ETF Applications are from big investment management companies looking to create spot Bitcoin ETFs. BlackRock, the world’s largest asset management, is among those trying to launch the first Bitcoin ETF in the United States. Let’s see how the ETF applications are going to solve this.
