The U.S. Securities and Exchange Commission (SEC) is reportedly fast-tracking the launch of an Ethereum futures exchange-traded fund (ETF), which could debut as early as next week. The move comes amid growing expectations that the U.S. government could shut down.
The first Ethereum futures ETF will launch on Monday
Bloomberg ETF analyst Eric Balchunas provided important insight into this development in an interview. tweet:”Update: Heard the SEC wants to speed up the launch of an Ethereum futures ETF (as they want to free it up from their work after the government shutdown), so they’re giving filers until Friday afternoon to update their documents (That’s no small task, especially for an independent issuer, to cram into 48 hours) so they can trade on Monday and trade on Tuesday.”
It looks like the SEC will make a lot of people #Ethereum Futures ETF may be listed next week https://t.co/YoBD1d1ay8
— James Seyff (@JSeyff) September 28, 2023
His colleague, Bloomberg Intelligence analyst James Seyffart, confirmed this view, noting that “it looks like the SEC may release a batch of Ethereum futures ETFs next week.” Although a recent report from Bloomberg stated that Ethereum futures ETFs have There’s a 90% chance of an October launch, but these latest updates seem to reinforce the near-term timeline.
According to previous predictions, Valkyrie’s Bitcoin Futures ETF (BTF) will become the first fund to include Ethereum exposure on October 3, with the strategic shift to include it from October 4. Another issuer, Volatility Shares, is expected to be included as the first to exclusively offer exposure to Ethereum futures, expected to be effective on October 11, thus facilitating the October 12 launch. SEC approval for the rollout may have been delayed until next week due to the impending U.S. government shutdown.
But as Bloomberg noted, of the 15 Ethereum futures ETFs submitted by nine issuers, not all are expected to be approved. Notable issuers in the queue include VanEck, ProShares, Grayscale, Volatility Shares, Bitwise, Direxion and Roundhill.
impact of the decision
Scott Johnson, financial attorney at Davis Polk commented On the SEC’s last-minute approach: “I hope everyone realizes that Gensler waited until now (to give issuers 48 hours) because he didn’t want to answer questions about this issue at the HFSC hearing earlier today. . You know, just a functional agency thing.”
Johnson highlighted significant implications, including Gensler’s SEC implicit confirmation that CME ETH futures are not security futures, cementing Ethereum’s status outside the scope of securities. The move could lay the groundwork for spot-traded ETFs because it means SEC Chairman Gensler will not revoke approval of Bitcoin futures to prevent the emergence of spot ETFs. Johnson has discussed this possibility in the past.
If Congress fails to finalize funding for the new fiscal year, the U.S. government is scheduled to shut down at 12:01 pm ET on October 1, which could disrupt the operations of federal agencies, including financial regulators. The urgency appears to underscore the SEC’s push to expedite ETF approvals.
While the potential launch of Ethereum futures ETFs has roiled the cryptocurrency space, it’s worth noting that the level of excitement surrounding these instruments doesn’t match the enthusiasm for their spot counterparts. Since 2021, the United States has hosted a Bitcoin futures ETF.
As of press time, the price of ETH is $1,609, and there has been no reaction to the good news.
Featured image from Shutterstock, chart from TradingView.com