The Race is On
In the world of cryptocurrency, Ethereum has been making waves with six different Ethereum futures ETFs recently submitted for Security and Exchange Commission (SEC) approval. The applications were filed by Bitwise, Roundhill, VanEck, Proshares, and Volatility Shares, with the latter’s “Ether Strategy ETF” being the first in line for a decision on October 11th. The remaining four are due for decisions on October 16th.
However, the SEC’s stance on crypto-related investment products, especially those not related to Bitcoin, remains a significant hurdle. The SEC’s chair, Gary Gensler, views every other digital asset besides Bitcoin as a security, which could lead to delays or denials of the applications. There’s also a possibility that these applications may be withdrawn soon, as suggested by Bloomberg Intelligence derivatives expert James Seyffart.
Hate to be a debbie downer, & I said this yesterday, but my base case is that these are withdrawn by the end of next week. These firms probably had these on the shelf ready to go and just needed to re-submit them.
James Seyffart
The Stakes and Strategies
The firms behind these applications are playing a high-stakes game. Seyffart suggests that the cost of submitting a filing and then withdrawing it is minuscule compared to the cost of being days or weeks behind a competitor on a first-of-its-kind launch. He estimates a 75% chance that these applications will be withdrawn based on gut instinct.
The Ethereum futures ETF applications are part of a broader trend of increasing interest in cryptocurrency investment products. However, the SEC’s cautious approach to these products, particularly those not related to Bitcoin, could slow down the pace of their introduction to the market.
A Personal Take on the Matter
From my point of view, the Ethereum futures ETF race is a clear indication of the growing interest in cryptocurrency as an investment. However, the SEC’s cautious approach could be a significant roadblock. While it’s understandable that the SEC wants to protect investors from potential risks associated with these new types of investment products, this could also stifle innovation in the sector.
On the other hand, the strategy of the firms involved in these applications is intriguing. They seem to be playing a game of chicken with the SEC, ready to withdraw their applications at a moment’s notice if they sense that approval is unlikely. This strategy could potentially give them a head start over their competitors if and when the SEC does start approving these types of products.
In conclusion, the Ethereum futures ETF race is a fascinating development to watch. It’s a testament to the growing interest in cryptocurrency as an investment, but it also highlights the regulatory challenges that this new sector faces. The next few weeks will indeed be interesting as we wait to see how this race unfolds.
