Invesco and Galaxy Digital are gearing up to launch a spot Ethereum (ETH) exchange-traded fund (ETF), joining a growing list of asset managers venturing into digital asset offerings.
A recent post on X (previously known as Twitter) by Bloomberg ETF expert, James Seyffart, unveiled that the duo has submitted an application for a spot Ether ETF, christened the Invesco Galaxy Ethereum ETF.
According to the company’s S-1 registration document, this particular ETF is designed to “mirror the performance of ether’s spot price.” It aims to achieve this by holding units of the cryptocurrency, which will be safeguarded by an as-yet unnamed custodian.
The documents reveal that while Invesco is acting as the sponsor, Galaxy Digital will play the role of the “execution agent,” tasked with selling ETH to cover the Trust’s expenditures.
Both Invesco and Galaxy Digital are the latest entrants in an expanding list of investment firms aiming for regulatory green lights for a spot ETH ETF.
In a recent development, the SEC has postponed its decision-making deadline on earlier applications from entities like ARK 21Shares and VanEck to December 25-26.
The commission cited the need for additional time to delve into the suggested rule modifications and associated concerns.
Future Ether ETFs Could Come Next Week
Although the approval for a spot Ether ETF might be on the horizon, ETFs based on Ether futures are anticipated to debut as soon as the upcoming week.
Several investment entities are already gearing up to incorporate ETH futures instruments into their asset pools.
Take VanEck as a case in point; they’ve publicized their imminent Ethereum Strategy ETF, labeled EFUT, which is slated for listing on the Chicago Board Options Exchange shortly.
Valkyrie, another notable player in the sector, intends to provide access to Ether futures by leveraging its established Bitcoin Strategy ETF, which has been rechristened as the Valkyrie Bitcoin and Ether Strategy ETF.
Meanwhile, Bitwise has recently tabled an amended proposal for their balanced Bitcoin and Ether futures ETF on September 28, aiming for a launch in the forthcoming week.
Kelly ETFs has also joined forces with Hashdex with plans to introduce futures Ether ETFs soon.
Much like the spot bitcoin ETF, the SEC has held back on approvals, raising issues about potential market manipulation and the risks faced by investors.
Yet, it seems the tide may be turning in favor of ETH futures ETFs, which could stand a better chance at SEC endorsement.
These futures ETFs would primarily invest in futures contracts listed on the Chicago Mercantile Exchange (CME), as opposed to the foundational smart contract asset itself.
The SEC perceives these futures ETFs more as a tradable commodity, overseen by the CME, which can potentially offer investors a safeguard against any price manipulation.
There’s buzz in the industry, backed by reports, hinting that the SEC might kickstart the greenlighting process for Ether futures ETFs as early as October. This possibility has undeniably piqued the curiosity of asset managers keen to dive in.