Key takeaways:
- Valkyrie will offer exposure to Ether futures as SEC delays spot Bitcoin ETF
- The fund’s new strategy to combine ether and bitcoin will be effective formally on October 3.
SEC Clears Path for Ether Futures Funds as Valkyrie’s ETF Shifts Focus from Bitcoin to Ethereum.
In a notable move, the Securities and Exchange Commission (SEC) has given its approval to crypto-focused investment firm Valkyrie’s request to transform its Bitcoin Strategy ETF. The fund will now extend its investment horizon to include ether (ETH) futures contracts, marking a significant development in the ETF space.”
Named EFUT, this actively managed ETF aims to capitalize on capital appreciation through its investment in standardized, cash-settled ETH futures contracts. It’s important to note that EFUT won’t directly invest in ETH or other digital assets; instead, it will allocate its assets to ETH futures contracts that hold the Commodity Futures Trading Commission’s endorsement.
Presently, EFUT intends to exclusively engage with ETH futures traded on the Chicago Mercantile Exchange.
On August 16, Valkyrie submitted an application to the SEC for a fund that does not provide direct exposure to Ether but rather invests in ETH futures contracts. This move comes as the firm expands its ETF offerings, including a Bitcoin Miners ETF, which tracks companies deriving revenue from crypto mining. Valkyrie was one of the pioneering companies in the U.S. to launch an ETF linked to BTC futures in 2021.
As of the publication date, the SEC had not yet published a proposed rule change allowing the listing of a new Ether futures ETF on the Nasdaq Stock Exchange. However, the SEC issued an order related to the ‘additional analysis’ required for the listing of the Valkyrie Bitcoin Fund, a spot BTC ETF.
Eric Balchunas, a senior analyst at Bloomberg Intelligence, suggested that the SEC might expedite the launch of ether futures ETFs in anticipation of a potential government shutdown.
The SEC made several filings during the week, delaying decisions on various planned ETFs, including a proposal by Ark Invest and 21Shares for a spot bitcoin ETF. It was not expected to review this proposal until November 11. Observers in the industry speculated that the accelerated disclosures were in response to the impending government shutdown, as SEC Chair Gary Gensler had stated during a Wednesday hearing that it would leave the commission with a ‘skeletal’ staff.
