The long-awaited Ethereum futures exchange-traded funds (ETFs) in the United States have been officially launched.
This brought excitement to the Web3 community although the value of the trading value in the first few hours was not as high as that of Bitcoin ETFs when launched two years ago.
An Ethereum ETF (Exchange-Traded Fund) is an investment fund that trades on stock exchanges, much like a company’s stock.
The fund’s objective is to mirror the price movements of Ethereum (ETH), enabling investors to gain indirect exposure to the cryptocurrency without owning it directly.
Ethereum ETFs hold significant appeal for both institutional and retail investors, as they offer a regulated and secure investment vehicle that provides an alternative to the complexities of purchasing and storing cryptocurrencies directly.
It can be recalled that several financial institutions applied for Ether ETFs this year in pursuant to a goal to allow their investors access to the crypto market in a secure manner. These first include ProShares, VanEck, Bitwise, Valkyrie, Kelly, and Volshares.
After consideration from the SEC, nine of the applications were approved and are being traded on the Chicago Board Options Exchange (CBOE).
Among the nine approved are ProShares’ Ether Strategy Fund (EETH), the Bitcoin and Ether Strategy ETF (BETH), and the Bitcoin and Ether Equal Strategy ETF (BETE).
Others are Bitwise – Bitwise Ethereum Strategy ETF (AETH) and Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP); VanEck – Ethereum Strategy ETF (EFUT); and Valkyrie – Bitcoin and Ether Strategy ETF (BTF).
The SEC has received numerous applications from prominent Wall Street firms, including BlackRock, seeking approval for spot crypto ETFs. However, the regulatory body is yet to decide on these applications.
In particular, Bitcoin Spot ETFs have undergone a review by the SEC, resulting in a response stating that the applicants failed to provide sufficient information for the approval of their application.
The SEC has also indicated, based on its calendar, that feedback on the application will be provided in October.
One of the primary concerns for regulatory authorities is the need for comprehensive regulations governing cryptocurrencies and related assets.
One of the reasons is the significant increase in cyber theft within the industry, particularly this year, with criminals having stolen over $1 billion in space.
Furthermore, there have been prosecutions and arrests of leaders in the cryptocurrency sector who have led their companies into bankruptcy.
On a general note, while the Ethereum futures ETFs may not have achieved the spectacular debut witnessed by their Bitcoin counterparts, their launch represents another significant step in the ongoing expansion of cryptocurrency-related investment products.