Ethereum Futures ETFs were first launched with low trading volume
New ETH futures exchange-traded fund (ETF) products have been launched with trading volumes of less than $2 million, which is a low volume.
After getting the green light from the Securities and Exchange Commission (SEC) last weekend, nine Ethereum futures ETFs launched on Monday. Five of these new ETFs, including the ProShares Ether Strategy ETF, the VanEek Ethereum Strategy and the Bitwise Ethereum Strategy ETF, offer Ethereum-exclusive futures contracts.
The rest of the list combines both Bitcoin and Ethereum futures products, including the Valkyrie Bitcoin and Ether Strategy ETF. These companies have renamed the futures contract to provide exposure to Ethereum.
First day volume smooth
Ethereum futures contracts are financial derivatives that allow investors to speculate on the future price of Ethereum. The performance of the ETF will be tied to the performance of the Ethereum futures contracts it holds.
Among the expected firms, Volatility Shares, canceled plans to launch futures. Justin Young, co-founder of the asset management firm, said the timing was not right. But he confirmed that the product will come in the future.
The young man may have been right at the time. The debut of those Ethereum futures ETFs has attracted mainstream attention, with their first-day trading volume likely falling short of expectations. The total trading volume of all nine ETFs was less than $2 million on the first day.
According to Bloomberg ETF analyst Eric Balchunas, there was no strong winner on the first day. However, the Valkyrie BTF was the top performing ETF with a trading volume of $882,000.
The analyst called all nine products “very average” and lower than he predicted. He added that it's a “long-term run,” and ETF investors will be more interested in spot ETFs.
The SEC remains skeptical about crypto spot ETFs. To date, the federal agency has rejected all Bitcoin and Ethereum spot ETF filings, citing significant market manipulation and the lack of a monitoring sharing agreement.
In addition, the SEC has recently extended deadlines to make a decision on whether a spot Bitcoin ETF will be approved. With crypto futures ETFs, things are obviously simpler. Before Ethereum futures products, several Bitcoin futures ETFs were approved.
Grayscale files for Spot ETF
Grayscale Investments, in partnership with the NYSE Arca exchange, filed to cover the Grayscale Ethereum Trust (ETHE) into a spot Ethereum ETF. In the latest move, Grayscale, like other high-profile companies, is gearing up for future approval of a crypto ETF featuring Ethereum and Bitcoin.
Previously, Grayscale made a similar move to convert its Bitcoin Trust into a Bitcoin spot ETF. The filing was initially rejected by the SEC, which led to a Grayscale lawsuit against the agency. In August, the court ruled a grayscale victory against the SEC and asked the regulatory body to review the grayscale application.
The Grayscale Ethereum Trust has emerged as a dominant force in the world of cryptocurrency investments, boasting $5 billion in assets under management. If approved, the Grayscale Bitcoin Trust will pioneer the first Bitcoin ETF launch in the United States.
This development could further expand cryptocurrency investment options for both institutional and retail investors.
Speaking to CNBC today, Bitwise CIO Matt Hougan and VanEck CEO Jan Van Eck hedged their bets on the SEC's approval of Bitcoin ETFs. Hugan is expected to see production of the site later this year and Jan van Eyck has predicted it will arrive in early 2024.
Meanwhile, much of the crypto community is optimistic that Wall Street's big players, especially BlackRock, will join the fray sooner or later. However, others argue that this positivity is not warranted, especially given the country's challenging regulatory landscape.
