Are Ethereum futures ETFs closer than we anticipate?

Posted: September 29, 2023

• VanEck has scheduled its Ethereum ETF for listing on the Chicago Board Options Exchange.
• The ETF will be under the management of Greg Krezner, VanEck’s Head of Active Trading.

VanEck, a prominent investment manager, has announced its imminent Ethereum [ETH] futures exchange-traded fund (ETF), the EFUT. The ETF is scheduled to be listed on the Chicago Board Options Exchange.

Notably, Bloomberg ETF analysts Eric Balchunas and James Seyffart have suggested that two TV advertisements released by VanEck hint at an earlier arrival of Ethereum futures ETFs than initially anticipated.

According to Seyffart, there’s potential for VanEck’s new ETF to launch as early as 2 October. This is despite a document from 29 September, which suggested that the proposal would not take effect for another 60 days.

He mentioned,

“Our understanding is that the SEC is accelerating approvals for these things.”

Balchunas anticipated intensified marketing efforts from ETF issuers as approvals for ETFs continue, especially when it comes to spot Bitcoin [BTC] ETFs. He predicted a marketing showdown, describing it as “unprecedented,” as multiple ETFs with similar offerings could launch simultaneously.

Seyffart, on 28 September, expressed that the U.S. Securities and Exchange Commission [SEC] might allow several Ethereum futures ETFs to launch the following week, potentially prompted by an imminent U.S. government shutdown.

At press time, there were 15 Ether futures ETFs from nine issuers seeking approval.

SEC delays Bitcoin and Ethereum spot ETF decision

Meanwhile, the SEC has decided to delay its decision on Ethereum spot ETF applications, mirroring the recent postponement of Bitcoin spot ETFs.

On 27 September, the SEC officially extended the deadline for reviewing the applications submitted by 21Shares and ARK Invest, led by Cathie Wood, with a new designated deadline set for 26 December.

In the realm of spot Bitcoin ETFs, applications from BlackRock, Invesco, Valkyrie, and Bitwise were submitted in June 2023. The initial delay was announced in late August 2023.

The SEC, referring to Section 19(b)(2)(B) of the Act, cited its institution of proceedings to determine whether the proposed rule change should receive approval or disapproval.

The latest delay occurred following a US Congressional hearing in which SEC Chairman Gary Gensler faced intense questioning. During the hearing, Gensler maintained his pessimistic stance on the cryptocurrency market.

The Chairman expressed concerns about how crypto companies handle customer funds. He also criticized the practice of commingling funds, stating that it could lead to unfavorable outcomes.

While Gensler acknowledged that Bitcoin is not a security, he refrained from making a determination regarding its commodity status. He also mentioned that the Commission has not yet taken action on the court’s order related to its decision on Grayscale.

Some members of the U.S. Congress had urged SEC Chair Gary Gensler to promptly approve the Bitcoin spot ETF, which the commission ultimately declined.

Market participants had hoped for leniency toward Ethereum during Gensler’s questioning on 27 September, but the SEC’s decision did not align with those expectations.