The U.S. Securities and Exchange Commission (SEC) has approved the first-ever Ethereum futures exchange-traded fund (ETF), a historic milestone for the crypto industry. The ETF, which will be launched by Valkyrie Investments, will allow investors to gain exposure to the second-largest cryptocurrency by market capitalization without having to buy or store it directly1.
The approval comes after the SEC delayed its decisions on several Bitcoin spot ETF proposals, citing concerns about market manipulation, fraud, and investor protection2. However, the regulator seems to be more open to futures-based ETFs, which track the price of contracts traded on regulated exchanges such as the Chicago Mercantile Exchange (CME).
The Ethereum futures ETF will have a ticker symbol of ETHF and will charge a 0.95% management fee. It will invest in Ethereum futures contracts and other financial instruments that provide exposure to the price movements of Ethereum1. The ETF will also hold cash and cash equivalents to meet its daily obligations.
The approval of the Ethereum futures ETF is expected to boost the demand and adoption of Ethereum, as well as increase its liquidity and price discovery. It could also pave the way for more crypto ETFs in the future, as the SEC continues to review other proposals from various issuers.
Ethereum is currently trading at $3,215, up 3.7% in the last 24 hours. It has a market capitalization of $377 billion, making it the second-largest crypto asset after Bitcoin3.