Fresh off a milestone launch, Volatility Shares is looking to offer an ETF that would hold ether futures contracts — just a few months after other fund issuers halted similar efforts.
Ether Strategy ETF is a company proposal, which was detailed in a SEC submission on July 28, 2017. It would invest cash settled ether futures trades at the Chicago Mercantile Exchange. The fund would not directly invest in ether.
First leveraged Bitcoin Futures ETF launched by the US issuer in early October, after the SEC gave the go-ahead.
Grayscale Investments, a financial services company, announced in May that it planned to introduce an ETF focused on the futures market for ether. Bitwise Asset Management and Direxion quickly followed.
Grayscale amended its filing to indicate that it was no longer interested in launching the product. Some others also pulled their application for ether ETFs.
Blockworks was told by two people who were directly involved in the issue that the SEC had ordered the fund groups not to continue their efforts. At that time, the regulator didn’t respond to a comment request.
Participants in the industry cited concerns about ether futures’ liquidity, and a lack clarity as to whether ether was a financial instrument or commodity.
The new filing comes after Volatility Shares launched its 2x Bitcoin Strategy ETF (BITX) — the country’s first leveraged bitcoin futures ETF — last month. That fund seeks investment results that correspond to two times the daily excess return of the S&P CME Bitcoin Futures Daily Roll Index.
“Interesting given SEC made some recent Ether filers withdrawal,” In a tweet posted on Monday, Bloomberg Intelligence’s Eric Balchunas commented about the ETH Futures ETF. “But.. VolShares just got (against the odds) a 2x Bitcoin Futures ETF out so maybe they [are] feeling confident [the] time is right.”
Volatility Shares’ spokesperson declined to comment immediately.
BlackRock and Fidelity are among the fund giants that have submitted a series of documents for a bitcoin spot ETF.
Neena Mihsra, Zacks Investment Research’s director of ETF Research, said to Blockworks in October that if a bitcoin ETF is approved, the SEC will have addressed its main concerns about fraud and manipulation.
“I don’t think there would be any need for the agency to experiment with a futures-based ether ETF first,” She said it at the time.
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