- Nate Geraci, ETF expert, expects low demand for Ethereum futures ETFs but sees potential in combined BTC+ETH futures ETFs.
- ETH Futures ETF is more likely to be approved than Spot BTC ETF, as experts opine on regulatory prospects.
Nate Geraci, the President of ETF Store and a well-known expert in Exchange Traded Funds (ETFs), predicts that the demand for Ethereum futures ETFs will be relatively low overall. However, he believes a combined product that includes Bitcoin (BTC) and Ethereum (ETH) futures ETFs would be more likely to succeed.
I expect demand for ETH futures ETFs to be fairly limited overall…
BTC futures ETFs have < $1.5bil AUM & much of that came in first few days post-launch.
Combined BTC + ETH futures ETFs prob best path to succeed for now IMO.
Ultimately, investors want real deal (spot ETFs). https://t.co/hNx61wmYbz
— Nate Geraci (@NateGeraci) August 3, 2023
Additionally, Geraci notes that in the event of Grayscale winning the lawsuit and the SEC approving both ETH futures ETFs and spot BTC ETFs, the likelihood of a spot ETH ETF receiving approval would also increase.
SEC Deliberates Spot BTC ETFs as Institutional Interest Grows
While the US Securities and Exchange Commission (SEC) continues to review the filings for Spot BTC ETFs, other market participants are exploring alternative investments due to the rising institutional interest in the cryptocurrency market. Recent reports indicate that Roundhill, VolatilityShares, and VanEck have submitted applications for Ether Futures ETFs, a distinct investment avenue, considering that the demand for Spot ETFs seems to have exceeded capacity.
An Ether Futures ETF would expose investors to digital assets by following the cryptocurrency’s futures contracts if approved. This type of fund enables investors to participate in Ethereum’s price movements through a traditional investment vehicle, bypassing the challenges of purchasing, storing, and safeguarding actual ETH. In contrast, a Spot BTC ETF tracks the price of physical Bitcoin.
While an ETH Futures ETF has a distinct purpose from a Spot BTC ETF, it is more likely to obtain approval, despite the latter being considered superior. However, the SEC has never approved ETF applications tracking Ethereum futures contracts. According to etf.com analyst Sumit Roy, one possible reason for this hesitancy is the ambiguity surrounding whether ether should be classified as a security. Another factor could be concerns about the liquidity levels of Ether futures.
On July 28, Volatility Shares, with assets totaling approximately $173.6 million across four ETFs, submitted an application for the ETH ETF. The move came as the competition for Spot ETFs grew crowded, with prominent players such as BlackRock, Fidelity Investments, Invesco, WisdomTree, and Ark Invest, among others, vying for the SEC’s approval to introduce their Spot BTC ETFs.
VolatilityShares has filed for an Ether Futures (ETHU). Interesting given SEC made some recent Ether filers withdrawal but.. VolShares just got (against the odds) a 2x Bitcoin Futures ETF out so maybe they feeling confident time is right, not sure.. h/t @NateGeraci pic.twitter.com/Iv9ywqaH2I
— Eric Balchunas (@EricBalchunas) July 31, 2023
On August 1, Roundhill and VanEck submitted their applications for ETH futures ETFs. Experts suggest that Roundhill’s preference for ETH futures over a Spot BTC ETF stems from a desire to bolster its position in the metaverse or potentially seize a first-mover advantage, given the fierce competition within the spot ETF category.
Could be. Or maybe they can be almost first to market here as Spot race is too crowded w big fish?
— Eric Balchunas (@EricBalchunas) August 1, 2023
Roundhill Investments is a registered investment advisor under the SEC dedicated to offering innovative ETFs. Established in 2018, the company brought new energy to the traditional investment management industry. It introduced several pioneering thematic funds, including the world’s first Metaverse, Sports Betting, and Generative AI ETFs. On the other hand, VanEck is a global investment manager with a wide-ranging portfolio.
The surge in interest for a Spot BTC ETF has paved the way for introducing an Ether futures ETF. Many believed that the popularity of BTC ETFs would inevitably lead to ETH ETFs becoming a prominent topic. Grayscale Investments, Valkyrie, and Bitwise Asset Management were among the first to file for an ETH futures ETF in May. However, they later withdrew their applications, likely due to ongoing concerns over the security classification of ETH.
Crypto News Flash does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to cryptocurrencies. Crypto News Flash is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned.
Credit: Source link
