Dual Ether/Bitcoin Futures ETFs Sought as Crypto Filings Mount

Direxion, ProShares apply as SEC is said to relax resistance to ether funds.

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Finance Reporter
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Reviewed by: Lisa Barr
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Edited by: Ron Day

In what may be a first for the ETF industry, Direxion and ProShares filed for dual ether and bitcoin futures exchange-traded funds as pressure mounts on regulators to approve a variety of cryptocurrency products.  

Filings from ProShares and Direxion describe funds that invest in futures for both bitcoin and ether, which are the Nos. 1 and 2 cryptocurrencies by market capitalization. While the SEC permits bitcoin futures ETFs such as the ProShares Bitcoin Strategy ETF (BITO), it hasn’t approved applications for funds tracking ether futures.  

The filings come in the wake of Volatility Shares’ July 28 ether ETF application that appeared to set off a flurry of ether filings from firms such as Grayscale Inc. and Bitwise Asset Management.  

At the same time, the SEC has told asset managers that it is ready to consider ether futures, the Wall Street Journal reported. The regulator asked issuers to withdraw applications for an ether futures ETF in May, according a Blockworks story

“The pressure is on the SEC here,” said Strategas Securities ETF analyst Todd Sohn in an interview. The dual ether and bitcoin futures ETF “would be at least a step forward from moving on from ‘vanilla’ crypto futures to combining different sorts of instruments within the crypto space.” 

The price of ether is up roughly 55% this year, according to CoinDesk.  

While ETF issuers want the benefits that come with being the first to have an application approved, other companies don’t want to get left behind should permission be granted, and not necessarily because they believe approval is likely, according to Morningstar ETF analyst Bryan Armour.  

Benefit of Dual Bitcoin Futures ETFs

The benefit of a dual bitcoin/futures ETF would be increased exposure to the digital asset sector. Firms are looking to offer investors a differentiated product as investor interest in cryptocurrency ETFs skyrockets.  

These cryptocurrency products, unlike the much-anticipated spot bitcoin, would track futures contracts as opposed to spot digital currency. The SEC has not indicated whether it will consider ether a commodity or a security. Its decision could be crucial to approving these ether future ETFs, according to etf.com’s Senior Analyst Sumit Roy.  

 

Contact Lucy Brewster at [email protected] 

Lucy Brewster is a finance reporter at etf.com covering asset managers, emerging technologies, and regulation. She hosts etf.com webinars and appears on Exchange Traded Fridays, etf.com’s flagship podcast. She previously was a finance fellow at Fortune Magazine where she covered markets, investment strategy, and venture capital. She has also been a freelancer writer at the publication Mergers & Acquisitions and a research fellow at the Historic Hudson Valley. 

She graduated from Vassar College in 2022 with a degree in History and was an editor of The Miscellany News, the college's award winning student run newspaper. 

Lucy lives in Brooklyn, NY, and in her free time she loves to run and find new recipes to cook.