Key takeaways:
- The US SEC has received an ETF application from asset management company Valkyrie for Ethereum futures.
- The native currency of the Ethereum blockchain is utilized for decentralized peer-to-peer trades.
The United States Securities and Exchange Commission (SEC) has received an exchange-traded fund (ETF) application from asset management company Valkyrie for Ethereum futures.
According to records from August 16, the application is an addition to the business’s prior decision to modify its investment strategy to comply with the regulator for a Bitcoin futures ETF.
According to the application, the fund will look to buy several ETH futures contracts rather than invest directly in Ethereum. The native currency of the Ethereum blockchain is utilized for decentralized peer-to-peer trades. It says in the document:
“Ether may be regarded as a currency or digital commodity depending on its specific use in particular transactions. Ether may be used as a medium of exchange or unit of account,”
The remaining assets of the ETF will be invested directly in cash, cash-like instruments, or high-quality securities, such as US government-issued bills, notes, bonds, money market funds, and corporate debt securities, as a supplement to the investments in ether futures.
In accordance with position limits set by the Chicago Mercantile Exchange, Valkyrie’s application states that the ETF’s investment in Ethereum futures contracts will be restricted to no more than 8,000 contracts each month.
Futures contracts are standardized contracts to purchase or sell an asset at a certain price in the future. If accepted, the ETF will allow investors to make bets on the future price of ether.
The flurry of applications comes after robust predictions that American regulators will soon give the go-ahead for a Bitcoin ETF in the nation. Several investing firms, including Wall Street behemoths BlackRock and Fidelity, are vying for regulatory approval.
On Tuesday, the company revealed that the London-based asset management company Jacobi’s new investment product will debut on the Euronext Amsterdam stock exchange. The asset management company also emphasized the fund’s socially and environmentally responsible attributes.
