Ethereum Fever Rises as Issuers Propose New ETFs

Ethereum Fever Rises as Issuers Propose New ETFs

Roundhill and T-Rex submitted filings for new ether-focused products.

ETF.com
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Contributing Editor
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Reviewed by: etf.com Staff
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Edited by: Ron Day

Ethereum fever has ticked higher over the past two trading days with two companies submitting applications for new funds based on the performance of ether, and a third issuer setting its fee for a proposed spot Ethereum exchange traded fund.

Rex Shares proposed separate long and inverse ETFs that depend on the performance of yet-to-debut spot Ethereum funds. A Roundhill Ether Covered Call Strategy ETF fund aims to provide income but also "exposure to the price return of one or more exchange-traded funds with exposure to ether."

"The Fund will purchase and sell a combination of call and put option contracts that utilize an Ether Futures ETF as the reference asset," Roundhill's S-1 registration statement said. 

Neither the Rex nor the Roundhill products will invest directly in ether, the native cryptocurrency of the smart contracts Ethereum blockchain. 

Ark, Franklin Templeton

In separate, updated S-1 filings, Franklin Templeton announced that it would charge a 0.19% fee for its proposed spot Ethereum ETF, but Ark Investment Management was absent from its latest filing for a similar product that it had initially proposed with 21Shares, which is now listed as the sole issuer for the product.

The latest developments come as the Securities and Exchange Commission weighs spot Ethereum applications from eight issuers, and amid demand for cryptocurrency-focused assets that has soared this year following the approval of the first spot bitcoin ETFs. 

Read More: SEC Changes Ethereum Rule, Sets Stage for ETF Approval | etf.com

Last month, the regulator permitted a rules change that significantly increased the likelihood that the new spot Ethereum products will begin trading in the not-so-distant future. The spot bitcoin products have generated almost $14 billion in inflows since they debuted on Jan. 11, according to U.K.-based Farside Investors.

Ether was recently trading at $3,780, up a few fractions of a percentage point over the past 24 hours, according to cryptocurrency markets provider CoinMarketCap. It has risen 23% during the past month as optimism about a spot Ethereum approval has grown. Bitcoin also rose slightly from the previous day.

T-Rex's New Funds

The T-Rex 2X Long Ether Daily Target ETF and T-Rex 2X Inverse Daily Target ETF will aim to meet daily investment objectives that, respectively, "magnify" the performance of ether and the inverse of to ether's performance with the latter "a result opposite of most mutual funds and ETFs," according to the S-1. The funds will not invest directly in ether. 

Meanwhile, Ark said in a statement that it continued to believe in "the transformative potential and the long-term value of the Ethereum blockchain," but that would "not be moving forward with an Ethereum ETF."

"We will continue evaluating efficient ways to provide our investors with exposure to this innovative technology."

It also said that it would remain "fully committed" to the spot bitcoin ETF, which it issued jointly with 21 Shares and that has generated about $2.5 billion in inflows since its January unveiling. 

James Rubin is a contributing editor for etf.com, where he produces the Morning Exchange and Weekly Exchange newsletters. A longtime financial writer, editor and book author, he formerly held positions as a news and markets editor for the Americas at CoinDesk, where he focussed on cryptocurrencies. 

He provided editorial guidance for a Wall Street Journal best-selling book on Bitcoin and oversaw a startup newsroom focused on digital financial assets. He has edited for TheStreet and Unchained, where he wrote daily news stories about the trial of fallen crypto entrepreneur Sam Bankman-Fried. His writing has also appeared in The Hollywood Reporter, Forbes.com, AdWeek, Bankrate, The Financial Brand and The Wall Street Journal. He has also written for Forbes Insights and the Economist Intelligence Unit, including papers presented at World Economic Forums in Davos and Mumbai. 

James is the co-author of The Urban Cyclist’s Survival Guide (Triumph Books) and has been interviewed about bike safety on a number of NPR affiliates. In a prior career, Rubin was a world-ranked tennis player, once competing in Wimbledon’s qualifying rounds. He speaks fluent German and is a graduate of the Columbia University Graduate School of Journalism and received his BA at Columbia University.