Valkyrie Investment wins race to offer first ETH futures ETF
- Valkyrie Funds will begin offering exposure to ETH futures through its newly combined Bitcoin and Ether Strategy ETF.
- The move makes it the first US firm to allow investors to bet on the future price of the Ether through an ETF.
- Meanwhile, there is speculation that other issuers are ready to launch as DeFi races to hold Ethereum futures.
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Valkyries Investments is the pioneer company to offer an Ethereum (ETH) futures first exchange-traded fund (ETF). It beats nine other issuers after securing approval from the US Securities and Exchange Commission (SEC) to allow investors a chance to wager on the future of Ether.
Also Read: Ethereum Futures ETF to roll out by first week of October: Bloomberg ETF analyst
Valkyrie becomes first ETH futures ETF issuer
Valkyries, famous for its Bitcoin mining ETF and a top performer on metrics of crypto-related ETFs in the US, has won the ETH futures ETF race, becoming the first to issue the product.
I guess @ValkyrieFunds didn't get screwed due to this shut down after all. Looks like $DEFI will begin holding #Ethereum futures tomorrow!! https://t.co/fdyrKHS32A
— James Seyffart (@JSeyff) September 28, 2023
The development is a paradigm shift, changing the commonplace destination for US investors to buy ETH, from Coinbase exchange to a more retail avenue through ETFs. Besides Valkyries, several other firms are interested in offering the product, including VanEck, Grayscale Investments, and Bitwise.
Noteworthy, this interest is not limited to the ETH futures ETF, extending to Bitcoin Spot ETF, with BlackRock and Fidelity at the forefront. If the SEC gives green light, investors would be able to access BTC’s spot price as opposed to its future value only purchasable by accredited investors will expansive investable assets.
Nevertheless, the SEC has shown reluctance to approve any of these products, thereby delaying crypto’s entry into mainstream finance, according to SEC Chair Gary Gensler. Specifically, a spot ETF makes it possible for investors to buy the product via brokerages.
From Valkyries Investment to Valkyrie Bitcoin and Ether Strategy ETF
Valkyrie’s intention is to convert its current BTC futures ETF into a combined fund offering BTC and ETH futures, changing the firm’s name to Valkyrie Bitcoin and Ether Strategy ETF. Nevertheless, the Nasdaq ticker BTF will not be changed.
The jockeying has begun in full as Valkyrie announcing they are buying Ether futures for $BTF today (ahead of formal name change on Tue). In related news, hearing that some issuers are ready to launch Monday morning, unclear how many yet, but at least a couple. Game on. https://t.co/I1FiVU58RZ
— Eric Balchunas (@EricBalchunas) September 28, 2023
In a statement to FOX Business, Valkyrie's Chief Investment Officer Steven McClurg said:
We are thrilled to be the first to offer ether futures to our investors as interest in the asset has grown exponentially over the past year.
With this, an ETF expert with Bloomberg Intelligence says “Valkyrie Fund’s ticker is BTF and it will begin holding a small percentage of ETH futures tomorrow (less than 10%). Will switch to 50% ETH and 50% BTC next week. Other ETH futures ETFs will launch next week likely Monday. Unsure of who or how many at this point.”
Initially, the plan was to start trading the fund on October 3, but the firm had to expedite the move in lieu of the possible government shutdown in the US to get ahead of the possibility of the commission scaling back operations.
Crypto ETF FAQs
What is an ETF?
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Is Bitcoin futures ETF approved?
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Is Bitcoin spot ETF approved?
Bitcoin spot ETF has been approved outside the US, but the SEC is yet to approve one in the country. After BlackRock filed for a Bitcoin spot ETF on June 15, the interest surrounding crypto ETFs has been renewed. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – got a victory in court, forcing the US regulator to review its proposal again. The SEC’s loss in this lawsuit has fueled hopes that a Bitcoin spot ETF might be approved by the end of the year.
Author
Lockridge Okoth
FXStreet
Lockridge is a believer in the transformative power of crypto and the blockchain industry.
