Expert says demand for ETH futures ETFs will be fairly limited overall as investors want real deal, spot ETFs


  • Roundhill Investments and VanEck have followed VolatilityShares to file for Ether Futures ETF.
  • Experts predict a brutal competition that could become crowded fast, given the small nature of the space.
  • The filings come as the SEC continues to work through the Spot BTC ETF filings, except for BlackRock’s thats accepted pending approval. 

Nate Geraci, President at ETF Store and renowned Exchange Traded Fund (ETF) educator has said that he expects demand for Ethereum futures ETFs to be fairly limited overall, adding that a combined product of BTC+ETH futures ETFs would have a better chance.

Geraci also observes that if Grayscale wins lawsuit and if the SEC allows both ETH futures ETFs and spot BTC ETFs, then chances of a spot ETH ETF approval would also be high. 

Also Read: Bitcoin Weekly Forecast: Could Spot ETF trigger BTC rally to $50,000?

Roundhill, Volatility Shares, VanEck file for an Ethereum Futures ETF

With the US Securities and Exchanges Commission (SEC) still deliberating the Spot BTC ETF filings, other players have started applying for a different investment as institutional interest in the crypto space grows. Based on recent reports, Roundhill, VolatilityShares, and VanEck have filed for Ether Futures ETFs, a different trade line, as the Spot campaign appears overbooked.

An Ether Futures ETF, if approved, would offer investors exposure to digital assets by tracking the cryptocurrency's futures contracts. Such a fund gives investors access to the price movement of Ethereum via a traditional investment vehicle, all the while eliminating the challenges of buying, storing, and safekeeping ETH. It is different from a Spot BTC ETF, which tracks the price of actual, physical Bitcoin.

A clear difference exists between a Spot BTC ETF and an ETH Futures ETF, with the latter being more likely to be approved despite the former being superior. Nevertheless, the SEC has never approved any ETF applications tracking Ethereum futures contracts, with etf.com analyst Sumit Roy attributing the hesitation to the fact that "there is ambiguity concerning whether ether is a security." Another explanation is concerns around Ether futures liquidity levels.

Volatility Shares, boasting up to $173.6 million in four ETFs, applied for the ETH ETF on July 28, as the Spot race became overcrowded with the likes of BlackRock, Fidelity Investments, Invesco, WisdomTree and Ark Invest, among others, seeking the SEC's approval to launch offer Spot BTC ETFs.

Roundhill and VanEck filed their ETH futures ETF applications on August 1, with experts attributing Roundhill's preference of ETH futures to the Spot BTC ETF alternative as a move to bolster its expertise in the metaverse or a possible first mover advantage, given the stiff competition in the spot ETF camp.

Roundhill Investments is an SEC-registered investment advisor committed to provide innovative ETFs. The firm debuted in 2018, reinvigorating up the stodgy investment management sector before launching several first-to-market thematic funds. These include the first Metaverse, Sports Betting, and Generative AI ETFs. Van Eck on the other hand is a global investment manager.

Spot BTC ETF narrative ushered in Ether futures ETF 

To some, the interest in BTC ETF made it only a matter of time before ETH ETFs become a headline topic. It is worth mentioning that Grayscale Investments, Valkyrie, and Bitwise Asset Management beat Roundhill, Volatility Shares, and VanEck file to it after filing for ETH futures ETF in May. However, they rescinded their filings without citing reasons, but all signs point to the security argument that continues to taunt ETH.

According to ETF Store Inc. President Nate Geraci, famous for being the first investment advisor to offer only ETFs, if the SEC approves the ETH futures ETFs, past applicants like Grayscale would jump back into the race despite withdrawing their filings. The ensuing interest and subsequent filings would also be way faster than how it happened in the Spot BTC ETF race considering the current one is a rather smaller market.

Also Read: US launches investigation into BlackRock owing to Chinese investments after Bitcoin ETF acceptance


Like this article? Help us with some feedback by answering this survey:



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

OpenAI parts ways with cofounder and chief scientist Ilya Sutskever

OpenAI parts ways with cofounder and chief scientist Ilya Sutskever

OpenAI cofounder Ilya Sutskever is exiting the firm for reasons not disclosed yet. Jakub Pachocki replaces Sutskever, taking the baton after running many of OpenAI’s most important projects, Altman says. Reportedly, Sutskever played a key role in the November ouster of CEO Sam Altman.

More Cryptocurrencies News

Sonne Finance suspends all Optimism markets after over $20 million exploit

Sonne Finance suspends all Optimism markets after over $20 million exploit

With PeckShield attributing the attack to a time-locked contract, Sonne Finance has suspended all Optimism markets, adding that the Base market is safe. Noteworthy, Sonne Finance is the first platform to launch a lending protocol on Optimism. 

More Cryptocurrencies News

Bitcoin Price Outlook: Will GameStop stock resurgence have downstream effect on BTC and alts?

Bitcoin Price Outlook: Will GameStop stock resurgence have downstream effect on BTC and alts?

Bitcoin continues to glide along an ascending trendline on the four-hour time frame. Meanwhile, the GameStop saga that has resurfaced after three years distracts the market, with speculation that it could inspire risk appetite among traders and investors.

More Bitcoin News

Ethereum bears attempt to take lead following increased odds for a spot ETH ETF denial

Ethereum bears attempt to take lead following increased odds for a spot ETH ETF denial

Ethereum is indicating signs of a bearish move on Tuesday as it is largely trading horizontally. Its co-founder Vitalik Buterin has also proposed a new type of gas fee structure, while the chances of the SEC approving a spot ETH ETF decrease.

More Ethereum News

Bitcoin: Why BTC is close to a bottom

Bitcoin: Why BTC is close to a bottom

Bitcoin (BTC) price efforts of a recovery this week have been countered by selling pressure during the onset of the American session. However, the downside potential appears to have been capped. 

Read full analysis

BTC

ETH

XRP