It’s Moving Day for cryptocurrency ETFs. ProShares has launched three crypto ETFs, including the first fund correlated to the performance of the ether.
The ProShares Ether Strategy ETF (EETH) targets the performance of the cryptocurrency ether. It is the first ETF to seek results that correspond to the performance of ether. Ether, the native currency of the Ethereum platform, is the second largest cryptocurrency.
ProShares also launched two ETFs that look to provide performance that corresponds to a blended return of bitcoin and ether. The ProShares Bitcoin & Ether Equal Weight Strategy ETF (BETE) rebalances monthly to a 50/50 weighting between the two cryptocurrencies. The ProShares Bitcoin & Ether Market Cap Weight Strategy ETF (BETH) rebalances monthly based on the market capitalization of bitcoin and ether.
Substantial Investor Demand for Cryptocurrency ETFs
ProShares CEO Michael Sapir said the firm has seen success with the bitcoin-linked ProShares Bitcoin Strategy ETF (BITO ). Since then, the firm has “seen substantial demand from investors for access to the performance of cryptocurrencies through ETFs.”
These ETFs will be available to investors through brokerage accounts with no need for a crypto custodian, exchange account, or wallet. These ETFs will be listed on the New York Stock Exchange.
Sapir added: "investors who are interested in cryptocurrencies but are concerned about custody risks will be attracted to our crypto-linked ETFs.” Investors “who are challenged by the learning curve and complexities required to buy them directly” may also be interested.
EETH, BETE, and BETH expand ProShares’ lineup of crypto-linked ETFs. In 2021, the issuer launched BITO, the first U.S. bitcoin-linked ETF, It has so far gathered more than $2 billion of net inflows. In 2022, The firm introduced the ProShares Short Bitcoin Strategy ETF (BITI ), the first U.S. short bitcoin-linked ETF.
All five ETFs invest primarily in ether futures, bitcoin futures, or both. The funds don’t invest directly in bitcoin or ether.
A Wave of Crypto-Linked ETFs
These three ProShares ETFs are part of a wave of crypto-linked ETFs that begin trading today. The VanEck Ethereum Strategy ETF (EFUT ) begins trading on the Cboe Exchange today. The Bitwise Ethereum Strategy ETF (AETH) and the Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP) trade on the NYSE today as well.
Plus, Valkyrie received approval to add ether futures to its Valkyrie Bitcoin Strategy ETF (BTF ). Hashdex and Volatility Shares also have futures-based ether ETFs in the works that could launch soon. Invesco also has an Ethereum ETF in the works that will invest in futures on the cryptocurrency. However, Invesco’s forthcoming fund is not structured as a ’40 Act fund.
VettaFi’s associate director of research Roxanna Islam said the SEC may have approved these crypto-linked ETFs before a government shutdown. (Congress passed a short-term bill on Saturday night to avert a shutdown.)
“The SEC has been clearing their desks ahead of the possible government shutdown,” she added. “This means issuing delays for spot bitcoin ETF filings while likely allowing ether future ETFs to potentially begin trading early next week.”
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