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The Wall Street Journal reported, citing knowledgeable sources, that the United States Securities and Exchange Commission (SEC) is likely to approve multiple simultaneous applications for Ethereum futures exchange-traded funds (ETFs).
16 Applications Await Approval
Since July, the regulatory agency SEC has been flooded with applications from various investment firms, including those that combine Bitcoin and Ethereum strategies. So far, the SEC has not instructed firms to withdraw their applications. This indicates a potential different response from the SEC compared to 2021 when firms were instructed to withdraw similar applications.
At least 16 applications are awaiting regulatory approval for Ethereum or Bitcoin-ETH futures ETFs. ETH is used as the native token of the Ethereum blockchain ecosystem and for transaction fees within the decentralized network. A crypto futures ETF tracks the performance of crypto futures contracts. For example, instead of directly investing in Bitcoin or Ethereum, a crypto futures ETF invests in futures contracts tied to the prices of these digital assets.
Response Expected by January
As the likelihood of crypto futures being approved becomes clearer, the SEC continues to receive applications. Earlier this week, asset management firm Valkyrie filed an application for an Ethereum futures ETF in addition to a previous application combining Bitcoin-Ethereum futures strategy. Valkyrie is leading this race and its BTC-ETH ETF application could be approved by the SEC in early October.
The advantage of being the first mover applies to every application in the ETF industry. According to data from Morningstar referenced by WSJ, ProShares’ first approved Bitcoin futures ETF has gathered $1 billion in assets under management since its launch in October 2021, while Valkyrie’s similar product launched a few days later has gathered approximately $28 million in assets under management.
Another significant decision by the SEC that affects the crypto sector is whether to approve a spot Bitcoin ETF in the United States. Wall Street giants such as Fidelity and BlackRock are among the companies awaiting approval. According to the timeline of the application, the SEC has until January to make its final decision.
