VanEck Seeks 1st Ether Futures ETF

August 19, 2021

VanEck submitted a filing for the first futures-based ether ETF on Wednesday as anticipation of the U.S.’ first cryptocurrency ETF builds.

One week after SEC Chair Gary Gensler suggested that the regulator may be open to greenlighting a futures-based bitcoin ETF, four fund companies filed paperwork seeking approval for such funds.

Now VanEck has added to the deluge with its prospectus for the VanEck Ethereum Strategy ETF, a fund that would hold ether futures contracts.

Ether is the native cryptocurrency of the Ethereum blockchain platform. However, as in the case of bitcoin, the SEC has been wary of approving any ETF that holds ether because of the unregulated nature of the underlying crypto ecosystem.

Gensler Softens His Tone

That said, in Gensler’s speech, he seems to have softened his tone slightly regarding a certain type of crypto ETF. The key section of his speech was:

“I anticipate that there will be filings with regard to exchange-traded funds under the Investment Company Act (’40 Act). When combined with the other federal securities laws, the ’40 Act provides significant investor protections.”

“Given these important protections, I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded bitcoin futures.”

ETF issuers took this to mean that Gensler was open to approving a futures-based crypto ETF rather than one that directly owns cryptocurrencies; hence the flood of bitcoin futures ETF filings over the past few weeks.

Bitcoin Before Ether

Notably, Gensler singled out bitcoin by name in his comments, which we can assume means that the SEC will be most likely to give the nod to a bitcoin ETF before an ether ETF.

Bitcoin has been around longer, has a greater market capitalization and more volume flowing through its associated futures market.

But if Bitcoin futures ETFs start to be approved, one can only assume that ether futures ETFs would follow suit at some point. With this filing, VanEck jumps to the front of that line.

The VanEck Ethereum Strategy ETF fulfils Gensler’s preference for a futures-based product regulated under the Investment Company Act of 1940.

There are currently three other ether ETF filings in the pipeline, each structured to hold ether directly rather than through futures, which means they are unlikely to be approved anytime soon.  

Email Sumit Roy at [email protected] or follow him on Twitter @sumitroy2

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