Interest in the cryptocurrency markets remains weak, with CoinShares reports indicating continued net outflows through trusts and other funds. The net outflows from institutions are a result of macro pressures and have been ongoing for the past six weeks. While Bitcoin has been stringing together weekly candles like a thread, VanEck has taken a new step.
VanEck announced today that it will soon launch the VanEck Ethereum Strategy ETF (EFUT), an actively managed ETF designed to invest in Ether (ETH) futures contracts to generate capital gains.
This fund does not directly invest in the cryptocurrency Ethereum. However, it will be indirectly exposed to ETH as an asset. The reason for fund companies taking such convoluted paths is their expectation of increased institutional demand in the crypto space.
In June, we saw many giant asset management companies, including BlackRock, filing for Bitcoin ETFs. EDX Markets launched, and many others followed suit.
Just a few minutes ago, we mentioned the possibility of soon-to-be-approved ETH futures ETFs even before the VanEck announcement. With this news, the size of open ETH positions increased by $300 million, and investors entered into anticipation of a potential ETH rally.
Regarding the fund, according to the latest announcement, it will invest in standardized, cash-settled ETH futures contracts traded on commodity exchanges registered with the Commodity Futures Trading Commission (CFTC). Currently, the only ETH futures contracts that the Fund plans to invest in are those traded on the CME exchange.
EFUT will be listed on the CBOE and actively managed by Greg Krenzer, VanEck’s Head of Active Investments.
The announcement today also included the following details:
“The value of Ethereum (ETH), Bitcoin (BTC), and the Fund’s futures assets, including dropping to zero, carries various risks. You should be prepared to lose your entire investment. The Funds do not directly invest in BTC, ETH, or other crypto assets.”
Let’s hope that when spot ETF approvals come, we will also see funds that directly invest, entering our lives. This difference can be a significant price catalyst since it will increase demand for physical assets along with limited supply.
VanEck was one of the first U.S. asset managers to offer investors access to international markets. It has been a constant presence in the field, with gold investments in 1968, emerging markets in 1993, and exchange-traded funds in 2006.