The SEC has allowed funds based on bitcoin futures, which may make the proposed ether applications look less ambitious given that it has not yet approved a spot fund based on the largest cryptocurrency in the world by market value.
Ether Strategy ETF, Bitwise Ethereum Strategy ETF, Roundhill Ether Strategy ETF, Ethereum Strategy ETF, Proshares Ether Strategy ETF, and Grayscale Ethereum Futures ETF are some of the most recent applications for ether future funds. The most recent, Direxion Bitcoin Ether Strategy ETF, will expose investors to futures contracts for both bitcoin and ether traded on the Chicago Mercantile Exchange.
ProShares in 2021 launched its bitcoin futures ETF to list and trade on NYSE Arca, which in June saw its largest weekly inflow in a year.
Nate Geraci, president of advisory ETF Store, said it looked like a “real possibility” that the ether futures ETFs could become a reality before a spot bitcoin ETF.
“That said, this is clearly a positive development for spot bitcoin ETF chances,” Geraci said on Twitter.
While ether has fallen 6.3% over the past month, it's up 11.9% over the past year. It's price fell 0.4% on Wednesday to $1,842.62, according to CoinGecko. Bitcoin has rallied 26.4% over the past year.
More and more applications for ETFs
Although the introduction of the first leveraged bitcoin futures ETF could be to blame, it is unclear why so many companies registered for an ether futures ETF all of a sudden.
After being approved by the SEC, the Volatility Shares 2x Bitcoin Strategy ETF, also known as BITX, launched in June.
Over the past few months, applications for spot bitcoin ETFs have come in, driving up the price of the digital commodity. A flurry of additional companies submitted following Blackrock's filing in June, competing for the eventual approval of such a product, including Fidelity, VanEck, and Valkyrie.
When asked about upcoming applications for a spot bitcoin ETF, SEC Chair Gary Gensler expressed worries about fraud and manipulation.
“There's a lot of noncompliance in this field,” Gensler said last week in reference to the possible combinations of various market activities that can take place on cryptocurrency trading platforms but are forbidden on conventional financial exchanges due to potential conflicts of interest and investor protection. Although some of the trading of different crypto tokens is covered by securities regulations, the platforms themselves are currently not always compatible with those tried-and-true safeguards against fraud and manipulation.