Key takeaways :
- VanEck Introduces Ethereum Strategy ETF, Pioneering Futures-Based Exposure to ETH
- The ethereum futures are designed to seek capital appreciation” through investing in ether futures contracts
VanEck has launched the VanEck Ethereum Strategy ETF, making it one of the early U.S. investment firms to offer a futures-based exchange-traded fund (ETF) linked to Ethereum (ETH), the world’s second-largest cryptocurrency.
This ETF, designed to accumulate capital, invests in Ethereum futures contracts without direct exposure to ETH itself. It provides exposure to cash-settled ETH futures contracts traded on Commodity Futures Trading Commission-regulated commodities exchanges.
Notably, VanEck’s product adopts a ‘C-Corp’ structure, offering potential tax advantages for long-term investors compared to registered investment company structures. Kyle DaCruz, Director of Digital Asset Product at VanEck, commented, ‘While U.S. investors currently lack the option of a spot ETF for digital assets, we are delighted to launch EFUT as a means to access the robust futures market built around ETH.‘
The ETF is actively managed by Greg Krenzer, Head of Active Trading at VanEck, boasting over two decades of experience across various asset classes, including futures trading.
VanEck emphasizes the importance of institutions contributing a portion of their profits to support Ethereum developers, highlighting a collaborative approach within the digital asset sector and encouraging peers to consider similar contributions.”
ProShares, Bitwise, and Invesco have followed suit by filing for various Ethereum-linked ETFs, with their expected launch later in the day, as reported by traders and media outlets.
This newly launched ETF carries an expense ratio of 0.66% and operates as a C-Corp, subjecting it to fund-level taxation, while any distributions to investors will also be taxable.
This development follows the recent announcement from the SEC, indicating a delay in its decision regarding the proposed rule change to list VanEck’s spot Bitcoin ETF until October 11, 2022. In their filing, the SEC stated, ‘The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.’
