On Aug. 18, Bloomberg cited ‘people familiar with the matter’ claiming that the regulator is not likely to block the products which many companies have been waiting on.
Ethereum futures ETFs are not entirely bullish for ETH because they allow institutional investors to short the asset. However, approval will be a big win for the crypto industry, which has been under heavy fire from the SEC over the past year or so.
Bloomberg crypto reporter Ally Versprille shared the news.
Scoop w/ @VildanaHajric. SEC poised to allow the first exchange-traded funds based on Ether futures, a major win for several firms that long have sought to offer the products. pic.twitter.com/41OmsWOYnP
— Ally Versprille (@allyversprille) August 17, 2023
Ethereum Futures ETF Greenlight
Officials have indicated that several might get approved by October but didn’t specify which, reported Bloomberg.
Many firms, including Volatility Shares, Bitwise, Roundhill, VanEck, Valkyrie, and ProShares, have filed to launch Ethereum-based ETFs.
The SEC has repeatedly blocked spot-based crypto ETFs but has approved futures-based Bitcoin funds.
ETF expert James Seyffart posted a list of current ETF applications pending approval. Valkyrie should be the first ETF with ETH futures on Oct. 3 or 4, he said before adding that the fund will be a mixed Bitcoin and Ethereum product.
This is what the dates look like as far as we’re aware for #Ethereum Futures ETFs. Valkyrie should be first ETF with Eth futures on Oct 3 or 4 but will be #Bitcoin & Ethereum. Vol Shares looks to be first pure Eth Futures ETF on ~Oct 12.
— James Seyffart (@JSeyff) August 17, 2023
Fellow ETF analyst Eric Balchunas said he wasn’t surprised:
“This not surprising to us, we had said they would approve Ether Futures early on in race. Nice to be validated. Now what does it mean for spot? Hard to say beyond it shows that their views/policy/tolerance can change.”
Meanwhile, CEHV partner and crypto exchange critic Adam Cochran labeled it as a “big win” and had implications in all of the crypto litigation.
“The SEC cannot really both simultaneously argue that ETH is some new intrinsic ‘crypto asset security’ that is unregistered and approve an ETH Futures ETF,” he said before adding, “So if the SEC is approving an Ethereum futures ETF they are intrinsically conceding that Ethereum itself is not a security.”
ETH Flash Crash
However, the bullish developments didn’t stop Ethereum prices dumping to their lowest levels since mid-June. In early Asian trading on Friday morning, ETH dumped to $1,576 before recovering on the SEC news.
Still, the asset is down 6% on the day, trading at $1,688 at the time of writing, so the promise of an ETF still hasn’t prevented the massive selloff.
Ethereum spent around two months hovering around $1,850 before this week’s declines. However, it could return to those levels if support can be found where it currently trades.