Valkyrie, an asset management firm, has officially applied to the SEC for approval of an Ether (ETH) futures-focused ETF. This move follows Valkyrie’s earlier adaptation of its investment strategy for a Bitcoin (BTC) futures ETF to comply with changing regulatory requirements.
The fund’s primary approach, as outlined in the application, focuses on obtaining multiple ETH futures contracts rather than directly investing in the cryptocurrency.
The application’s details delve into the crucial categorization of Ether, classifying it as either a digital commodity or a currency. This determination rests on its role in specific transactions, with the potential to function as a medium of exchange or a unit of account.
It’s acknowledged that certain retail businesses in the U.S. and worldwide do indeed accept Ether. However, its usage in commercial and retail transactions is still somewhat constrained. The application also highlights Ether’s dual capacity as a store of value and its inherent price volatility.
Regarding the ETF’s structure, investment allocation towards Ether futures contracts will be limited to 8,000 monthly contracts. This aligns with the position limits set by the Chicago Mercantile Exchange.
Ether futures contracts function through predetermined agreements to buy or sell the cryptocurrency at set prices in the future. If the ETF secures approval, it would provide investors with a platform to speculate on future Ether price movements.
Valkyrie’s Crypto ETF Endeavors and Industry Dynamics
Valkyrie’s strategic moves extend beyond the Ether ETF initiative. It recently resubmitted its application for a Bitcoin spot exchange-traded fund to the SEC, indicating an ongoing push to navigate the regulatory approval process.
Noteworthy industry players, including BlackRock and Fidelity, are also renewing their efforts for ETF approval. A significant step in this direction was the filing of the 19b-4 document, revealing a collaboration between cryptocurrency exchange Coinbase and these giants for a surveillance-sharing agreement.
A recent update involves Valkyrie, headquartered in Tennessee, submitting a 497 filing. This filing outlines the company’s strategy to convert $BTF into a dual ETF that encompasses both Bitcoin and Ether. This tactical timeline could potentially position Valkyrie ahead of competitors by up to two weeks for similar ETF launches.
In the competitive race for the first Bitcoin Spot ETF approval, the industry closely watches new submissions and revisions. It eagerly anticipates the pioneering firm that will take the lead.
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