Asset management firm Valkyrie has applied to the US Securities and Exchange Commission (SEC) for an Ethereum futures exchange-traded fund (ETF). This application, made on August 16, indicates Valkyrie’s intention to expand its investment offerings beyond its Bitcoin futures ETF proposals.
The ETF will not directly invest in ETH. Instead, it aims to purchase various ETH futures contracts. Within the decentralized ecosystem, users widely utilize Ethereum’s native cryptocurrency, ETH, for peer-to-peer transactions.
The submitted document states that Ethereum’s classification may change and it may be considered a currency or digital commodity depending on its use in private transactions.
While some major and minor retailers accept ETH as payment, its use in commercial and retail transactions is relatively limited. Ethereum has also been marked by significant price fluctuations despite exhibiting characteristics of a store of value.
Valkyrie’s application specifies certain limitations on investing in Ethereum futures contracts for the ETF, limited to 8,000 contracts per month in accordance with position limits set by the Chicago Mercantile Exchange. If the application is approved by the SEC, investors will have the opportunity to speculate on future prices of Ethereum through the ETF.
In addition to Ethereum futures, the ETF plans to invest its remaining assets in cash, cash equivalents, or high-quality securities, including bonds, stocks, treasury bills, money market funds, and corporate debt issued by the US government.
Notably, Valkyrie is one of several major asset management players seeking approval for an Ether futures ETF for US investors. Others include Grayscale, VanEck, Bitwise, Volatility Shares, ProShares, and Round Hill Capital.
The increase in these applications reflects widespread anticipation that US regulatory authorities may soon approve a Bitcoin ETF. Many investment giants such as BlackRock and Fidelity are also awaiting regulatory approval for their ETF proposals.
