Leading investment manager, VanEck, has unveiled its intention to launch an Ethereum futures exchange-traded fund (ETF).
According to a recent official press statement, the new fund, dubbed the VanEck Ethereum Strategy ETF (EFUT), will predominantly center on standardized, cash-settled ETH futures contracts.
These specific contracts are executed on commodity exchanges accredited by the Commodity Futures Trading Commission (CFTC).
Of note, the fund will target ETH futures primarily transacted on the Chicago Mercantile Exchange (CME).
At its inception, the ETF will feature on the Chicago Board Options Exchange (CBOE) and join VanEck’s existing futures ETF portfolio, including the VanEck Bitcoin Strategy ETF (XBTF).
Similar to XBTF, EFUT will function under a C-Corp framework, which may offer tax benefits for those looking at long-term investments.
C-corps refer to corporate legal configurations where the company and its owners undergo separate taxation.
These two ETFs aim to furnish investors with a futures-centric insight into prominent digital currencies.
Spot ETH ETF Uncertainty May Heat Race for Futures ETH ETF
Recently, numerous investment management firms have pursued authorization from the Securities and Exchange Commission (SEC) for spot ETH ETFs.
In June, Volatility Shares took the lead, with other key players like Bitwise, Grayscale, VanEck, Proshares, and Roundhill soon following suit.
These submissions to the SEC detail initiatives to roll out strategies focused on ETH, the globe’s second-largest cryptocurrency.
Nevertheless, mirroring the situation with spot bitcoin ETFs, the SEC remains hesitant to grant approvals, flagging worries related to potential market tampering and investor susceptibility.
Given the ambiguity around spot ETH ETFs, futures ETH ETFs seem to stand a better chance of securing a nod from the SEC.
Instead of investing in the primary smart contract asset, futures ETFs would allocate their funds directly to futures contracts listed on the Chicago Mercantile Exchange (CME).
The SEC perceives futures ETFs as commodities overseen by the CME, offering a safeguard to investors against potential price tampering.
Recent whispers indicate that the SEC might kick off the approval process for Ether futures ETFs as early as October. This prospect has piqued the interest of many asset managers eager to dive in.
Fueling this conjecture, James Seyffart, an Intelligence analyst from Bloomberg, pointed to a rising likelihood of the SEC greenlighting ETH futures ETF proposals.
Seyffart commented, “It seems the SEC might approve several #Ethereum futures ETFs as early as next week.”
Based on his observations, there’s been an unusual surge in the number of recognized ether futures ETF filings by the SEC.
This elevated pace of activity might be linked to the looming shutdown set for 12:01 a.m. ET on October 1. If Congress can’t strike a deal or devise a budgeting plan for the upcoming fiscal year, this shutdown will ensue.
Such an event would ripple through the SEC, additional financial oversight bodies, and other federal establishments. Still, more concrete information is anticipated in the near future.