Kelly Files For ETH Futures ETF

November 29, 2021

Editor's Note: This filing was withdrawn on Dec. 3.

In the wake of three bitcoin futures ETFs launching in the last month and a half, a firm headed by Kevin Kelly is looking to launch the first-ever ethereum futures fund on a U.S. exchange.

Kelly ETFs filed for the Kelly Ethereum Ether Strategy ETF (EX) on Monday under the Investment Company Act of 1940, meaning it could become automatically effective on Feb. 12 next year barring delays from regulators.

The fund would aim to buy near-month ethereum contracts on the CME, similar to how the ProShares Bitcoin Strategy ETF (BITO), the Valkyrie Bitcoin Strategy ETF (BTF) and the VanEck Bitcoin Strategy ETF (XBTF) aim to closely track the spot price of bitcoin.

EX’s filing didn’t include an exchange or an expense ratio.

Ethereum is the second-largest cryptocurrency behind bitcoin, sporting a $522.6 billion market cap, according to CoinMetrics. Its futures also trail well behind bitcoin futures in size. A total of 9,975 ethereum futures contracts traded on the CME on Friday, compared to 16,000 bitcoin contracts.

The filing is the newest test from ETF issuers seeing just how much the SEC is willing to budge from its longtime stance against allowing cryptocurrencies to underlie registered investment vehicles. VanEck and ProShares both filed ethereum futures funds days after SEC Chairman Gary Gensler signaled his preference for futures-based funds over physical ETFs, but both were pulled in late August.

The EX filing is the only ethereum futures ETF in front of the SEC as of Monday.

BITO was the first ETF to launch in the U.S. with bitcoin as its underlying in mid-October, and crossed the $1 billion AUM mark within two days in what was seen as a watershed moment for widespread crypto adoption. But the SEC denied VanEck’s latest effort to launch a physically backed bitcoin ETF two weeks ago.

Contact Dan Mika at [email protected], and follow him on Twitter

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