The U.S. Securities and Exchange Commission (SEC) has recently updated its website to include ProShares’ filing for an Ethereum spot exchange-traded fund (ETF).
This update, pointed out by the Bloomberg analyst James Seyffart suggests a rather quick turn around by the SEC but the actual listing might not be simultaneous with other ETFs.
SEC Affirms ProShares Ethereum ETF
ProShares, an investment firm that offers a variety of products, is entering the crypto market with an Ethereum ETF that seeks to invest in the price of Ethereum, which is the second-largest digital currency by market capitalization.
The filing was made under the 19b-4 form, which is a critical step in gaining regulatory approval to list on the New York Stock Exchange (NYSE).
ProShares has chosen Coinbase Custody Trust Company as their custodian meaning that the fund management company is committed to following the rules and protecting investors’ money.
However, James Seyffart has pointed out that the ETF may not hit the market at the same time as other competing products, meaning a gradual entry into the market. This cautious approach may be due to the intricate regulatory landscape governing digital assets.
8 ETH ETF’s Approved
The application by ProShares comes at the heels of approvals for eight other ETFs by giants in the industry such as VanEck and BlackRock.
These developments are part of a wider trend of cryptocurrency ETFs, which give investors exposure to digital assets without having to buy the assets themselves.
The SEC’s decision timeline extends up to 90 days from the date of filing, placing the potential approval as early as July 2024. This timeline is crucial for market participants who are keenly observing the integration of cryptocurrency products into mainstream financial services.
Innovations and Investor Considerations
In addition to the spot ETF, ProShares has introduced two Ethereum-linked futures ETFs—ProShares Ultra Ether ETF (ETHT) and ProShares UltraShort Ether: ETHD ETF. These products started trading on 7th June 2024 and are aimed to provide the investors with multiple ways of participating in the price changes of Ethereum with both long and short positions.
Nevertheless, the proposed spot ETF will not include Ethereum staking features, which is consistent with the SEC’s guidelines prohibiting such elements in ETFs.
This decision may impact the investors who are in the search of extra returns through staking rewards because this is not possible with this ETF structure.
Meanwhile, Ethereum (ETH) price has been in a bearish rally in the last 24 hours with prices swaying between an intra-day high and low of $3,646 and $3,719, respectively. At press time, ETH was exchanging hands at $3,671, a 0.73% decline from the 24-hour high.
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