UpdatesAug 18, 2023

Valkyrie Investments has applied for an Ethereum ETF for the futures market

Based on this filing, almost all of the fund's assets will most likely be invested in exchange-traded ETH futures.

According to the latest filing dated August 16 this year from the U.S. Securities and Exchange Commission (SEC), financial firm Valkyrie Investments has applied for approval to open an Ethereum ETF to the futures market.

Valkyrie Investments is intensely bidding for ETFs on Ethereum

According to a filing filed by the above-mentioned investment firm with the SEC, Valkyrie Investments wants to launch an ETF offering exposure to the Ethereum cryptocurrency for the futures market. This means, however, that the fund's assets will not be invested solely in Ethereum itself.

The investment capacity associated with the aforementioned ETF may be limited to some extent primarily by the regulations set out by the Chicago Mercantile Exchange (CME). These limits are intended to limit the number of Ethereum futures contracts to 8,000 contracts per month. Each of them consists of 50 ETH. It follows that the investment fund may invest in long-term futures contracts and additional hedging investments if it is able to meet these limits.

It is worth noting that previously Valkyrie investments focused its efforts to merge its BTC futures ETF (called “Bitcoin Strategy ETF”) with ETH futures in a notification dated August 4 this year. As a result of the operations described above, this enterprise will most likely finally integrate both investments and adapt the name of the fund accordingly. This will happen starting October 3 this year if the application is approved.

Growth of investor interest in cryptocurrency ETFs

Over the course of the year, many companies have started applying for the opportunity to launch a bitcoin ETF for the spot market. This trend was intensively reinforced after the largest investment company in the world, i.e. BlackRock, submitted such an application to the SEC. At this point, it should be added that so far the US financial regulator has not yet approved any such fund.

Currently, against the backdrop of increased efforts by giants from the financial sector to create ETFs, investment funds focused on the futures market have begun to enjoy greater demand. Moreover, in recent weeks, applications for Ethereum ETFs for the futures market have been made by companies such as Grayscale, Bitwise, VanEck, Roundhill and ProShares.