Valkyrie to Offer the First Ethereum Futures ETF

Valkyrie is again ahead of the futures ETF offering, but could its Ethereum futures ETF be the catalyst for Ethereum’s new heights?

Valkyrie Investments, a leading digital asset management firm offering a wide range of products and services, will launch the first Ethereum futures exchange-traded fund (ETF) before September 30, according to Fox Business.

The move will make Valkyrie the first to offer an investment product featuring Ethereum futures.

Valkyrie Offers First Ethereum Futures ETF

The company has reportedly added access to Ethereum through its Valkyrie Bitcoin Strategy ETF (BTF), a futures ETF that was launched in October 2021. Currently listed on the NASDAQ Stock Exchange, it is also the first managed Bitcoin futures ETF approved by the U.S. Securities and Exchange Commission (SEC).

Steven McClurg, Co-Founder and Chief Investment Officer of Valkyrie Investment, said in an interview with FOX Business: “We are thrilled to be the first to offer ether futures to our investors as interest in the asset has grown exponentially over the past year.”

The amendment will provide investors with exposure to the two largest digital assets under the ticker symbol BTF. This development can bring new institutional and retail investors to the crypto space.

Bloomberg analysts James Seyffart and Eric Balchunas previously said that a couple of Ethereum futures ETFs is likely to debut next week. The two experts, however, did not specify the sources of their statements.

The ETF Game is Heating Up

The hype around Ethereum ETFs started in August after a number of companies filed to get approval from the SEC. The list of major applicants includes Volatility, Bitwise, VanEch, Roudhill, ProShares, and Grayscale.

While an Ethereum futures ETF approval is positive, investors are more interested in the offering of an Ethereum spot ETF. Since a spot Ethereum ETF allows investors to directly own Ethereum, it would make it easier for retail investors and institutional investors alike to gain exposure to Ethereum.

Similar to Ethereum spot ETFs, Bitcoin spot ETFs are also a more attractive investment option compared to Bitcoin futures ETFs. As of September 2023, there have been seven Bitcoin futures ETFs approved by the SEC.

The major ones are Valkyrie Bitcoin Strategy ETF (BTF), ProShares Bitcoin Strategy ETF (BITO), VanEck Bitcoin Strategy ETF (XBTF), Invesco Bitcoin Strategy ETF (BITI), Galaxy Bitcoin Strategy ETF (BTC), Bitwise Bitcoin Strategy ETF (BITW), and Teucrium Bitcoin Strategy ETF (BTFC).

When Spot ETFs?

To date, the SEC has not yet approved any Ethereum or Bitcoin spot ETF. A potential reason behind this reluctance is that the agency might be concerned about the risks associated with investing in spot ETFs, such as market manipulation, volatility, and fraud.

Additionally, the ongoing challenges surrounding crypto regulations could add more time to the review process. However, there will be a new class of crypto ETFs soon.

There are a long list of applications pending with the SEC, but many experts believe that a crypto spot ETF is likely approved in the future. The federal agency, on the other hand, can’t keep extending the decision deadline forever.

The SEC recently postponed the decision on Ethereum spot ETF filings from VanEck and ARK Invest, and the Bitcoin spot ETF filings from BlackRock, Invesco, and Bitwise.

Since it broke out, the news has generated headlines and sparked excitement in the crypto community. The second-largest cryptocurrency is trading around $1,650 at the time of writing, up 4.71% in the past 7 days.

The Ethereum community expects that the news could be a catalyst for a price surge. However, the price of Ethereum has shown little to no change following the big news. All eyes are set on the network’s next upgrade, Dencun, which is tentatively scheduled for 2024.