Valkyrie Applies for Ethereum Futures ETF

Valkyrie, an asset management company, has submitted an application to the US Securities and Exchange Commission (SEC) for a futures exchange-traded fund (ETF) focused on Ethereum (ETH).

In order to comply with regulatory guidelines, Valkyrie has adjusted its investment approach for a Bitcoin (BTC) futures ETF in the past.

The proposed strategy for the ETH ETF involves acquiring multiple ETH futures contracts instead of directly investing in Ether.

The application emphasizes that categorizing Ether as a digital currency or commodity depends on its use in specific transactions, potentially as a medium of exchange or unit of account.

Although some retailers accept Ether in the US and global markets, its use in commercial and retail transactions is somewhat limited. The application also acknowledges the potential of Ether as a store of value and its significant price volatility.

Aside from investments in Ether futures, the remaining assets of the ETF will be allocated to cash, cash-like instruments, and high-quality securities, including US government bonds, bonds, stocks, money market funds, and corporate debt securities.

Investment Limitations and Opportunities

Within the ETF framework, the allocation for Ether futures will be restricted to 8,000 contracts per month, in accordance with position limits set by the CME.

These futures contracts involve pre-determined agreements to buy or sell an asset at a specified price in the future. Once approved, investors will have the opportunity to speculate on future Ether prices through the ETF platform.

Other Cryptocurrency ETFs

Valkyrie has also made notable moves in the ETF space beyond the Ether ETF. The company recently resubmitted its application for a Bitcoin spot exchange-traded fund (ETF) to the SEC on July 5th.

Other major asset management firms like BlackRock and Fidelity are also making renewed attempts at gaining ETF approval. BlackRock has filed a 19b-4 document, indicating that Coinbase will serve as the cooperating partner for the Watch Share Agreement.

Additionally, Valkyrie filed 497 forms, expressing its intention to convert $BTF into a Bitcoin and Ether ETF by October 3rd. This puts the potential launch two weeks ahead of 13 other similarly scheduled launches.

The competition to be the first approved Bitcoin Spot ETF is closely watched by the community, with attention given to new filings and modifications to see which company will be the first mover in this space.

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