The US Securities and Exchange Commission is about to approve the first exchange-traded funds based on Ethereum futures, which will be a significant victory for a number of companies that have long sought to provide the products. People with knowledge of the situation predict that the regulator won't prevent the products, which would be based …
The US Securities and Exchange Commission is about to approve the first exchange-traded funds based on Ethereum futures, which will be a significant victory for a number of companies that have long sought to provide the products. People with knowledge of the situation predict that the regulator won’t prevent the products, which would be based on futures contracts for the second-largest cryptocurrency. The application to introduce the ETFs has been submitted by almost a dozen businesses, including Volatility Shares, Bitwise, Roundhill, and ProShares. Which funding would be approved wasn’t immediately clear.
One of the people, who asked not to be named because they were disclosing private information, claimed that officials had said that several might by October. SEC officials declined to comment. However, in late 2021, it began authorising trading in a fund that uses Bitcoin futures contracts that trade on the Chicago Mercantile Exchange, despite the regulator’s refusal to permit an ETF based directly on a cryptocurrency. There has been growing speculation that a product featuring Ether futures, which also trade on CME, will be the next. Despite the hype, the SEC has been slow to approve a product containing derivatives in the second-largest cryptocurrency. According to CoinGecko, the largest cryptocurrency in the world, Bitcoin, is worth approximately $512 billion, while Ether is worth $195 billion. The SEC and the industry are still at odds over its opposition to ETFs that are based on Bitcoin itself. In one high-stakes case, a panel of justices from the US federal appeal court will rule on a complaint filed by Grayscale Investments LLC to overturn the SEC’s denial of its request to convert its Bitcoin trust into an ETF.
According to the SEC, there are numerous risks for investors in the cryptocurrency industry. The government is concerned that price manipulation, a lack of liquidity, and the extreme price swings of Bitcoin may be too much for individual investors. Nevertheless, a number of businesses, including BlackRock Inc., recently submitted applications to establish ETFs that are based only on Bitcoin. The BlackRock filing in June aided in raising the token’s price above $31,000. Since then, it has spent the majority of July and August circling about $29,000. Bitcoin was trading close to $26,000 on Thursday. At $1,600, ether has decreased by around 11% so far this month.
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