The U.S. Securities and Exchange Commission (SEC) has granted approval for the first Ethereum futures exchange-traded fund (ETF) in crypto history, according to a press release by Valkyrie Investments1. The Valkyrie Ethereum Strategy ETF will begin trading on the New York Stock Exchange (NYSE) under the ticker symbol ETHF on October 2, 2023.
The ETF will invest in Ethereum futures contracts traded on regulated exchanges, as well as other financial instruments that provide exposure to the price of Ether, the native cryptocurrency of the Ethereum network. The ETF will also hold cash and cash equivalents to meet its daily liquidity needs.
The approval of the Ethereum futures ETF comes after the SEC delayed decisions on several proposed Bitcoin spot ETFs, citing concerns over market manipulation, investor protection and regulatory oversight2. However, some analysts believe that the SEC has no choice but to approve the Bitcoin spot ETFs soon, as they are more transparent and less risky than the futures-based ones3.
The Ethereum futures ETF is expected to attract more institutional and retail investors to the crypto space, as it offers a convenient and regulated way to gain exposure to the second-largest cryptocurrency by market capitalization. Ethereum is widely regarded as the leading platform for decentralized applications (DApps), smart contracts, decentralized finance (DeFi) and non-fungible tokens (NFTs), which are some of the most innovative and popular use cases of blockchain technology.
The news of the Ethereum futures ETF approval has boosted the price of Ether, which rose by more than 5% in the last hour, reaching a new all-time high of $4,567.234. The total market capitalization of Ethereum also surpassed $500 billion for the first time, making it the second-most valuable asset in the world after Bitcoin.