In a pivot away from the relentless quest for a spot bitcoin ETF, in the last few days no fewer than six ETF issuers have filed paperwork with the SEC to launch ether futures ETFs. Ether is the cryptocurrency of the Ethereum blockchain network and is the second-largest cryptocurrency by market capitalization after bitcoin.
The different filings include the following:
- Ether Strategy ETF (ETHU)
- Grayscale Ethereum Futures ETF (ETHG)
- ProShares Ether Strategy ETF
- Bitwise Ethereum Strategy ETF
- VanEck Ethereum Strategy ETF
- Roundhilll Ether Strategy ETF
However, there are also permutations of the concept in registration as well. Direxion filed for the Direxion Bitcoin Ether Strategy ETF, which will invest in futures contracts on bitcoin and on ether. ProShares also filed for a similar bitcoin and ether futures combo strategy as well as a fund that will offer inverse exposure to ether futures.
Why Now?
Volatility Shares kicked off the scramble when it filed for its ether strategy (ETHU) on Friday. The other firms’ filings came in rapidly at the start of this week. That’s no doubt because when ProShares was first to market with its ProShares Bitcoin Strategy ETF (BITO ) in October 2021, the fund quickly accumulated more than $1 billion in assets in just a few days of trading.
Valkyrie launched its own version, the Valkyrie Bitcoin Strategy ETF (BTF ), just a few days later. It has just $30 million in assets today. The VanEck Bitcoin Strategy ETF (XBTF ), which rolled out almost a month later, has managed to grow to more $46 million, but it has an expense ratio of 0.76%, which is almost 20 basis points lower than that of BITO.
Being first to market for a particular asset isn’t a guarantee that an ETF will dominate its category, but it has clearly helped, historically.
This certainly doesn’t mean firms are giving up on launching a spot bitcoin ETF. BlackRock just restarted that scramble when it filed for its own fund in that category back in June, quickly refiling with a revised prospectus in response to SEC comments. However, the approval for such a product remains a giant question mark, and the SEC has been pretty adamant that all its conditions must be met for them to approve such a fund.
However, with bitcoin futures ETFs already trading, an ether futures ETF doesn’t seem like such a big leap.
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