Valkyrie charts new territory, files for Ethereum futures ETF with SEC

• Valkyrie sought SEC approval for an Ether futures ETF, aiming to broaden its investment options.
• The Asset management firm joins prominent players like Grayscale, VanEck, and ProShares in pursuing Ether futures ETFs.

Asset management firm Valkyrie has submitted an application to the U.S. Securities and Exchange Commission (SEC) for an Ethereum [ETH] futures exchange-traded fund (ETF). The application, filed on 16 August, signals Valkyrie’s intent to expand its investment offerings beyond Bitcoin [BTC] futures ETF.

In the proposal, the ETF won’t directly invest in ETH itself. Instead, it aims to purchase a range of ETH futures contracts. Within its decentralized ecosystem, users widely employ ETH, Ethereum’s native cryptocurrency, for conducting peer-to-peer transactions.

The submitted document notes that Ether’s classification can vary, potentially being considered a currency or digital commodity depending on its usage in specific transactions.

Although some retailers, both large and small, accept ETH as payment, its use for commercial and retail transactions remains relatively limited. Ether also exhibits characteristics of a store of value but it has been marked by considerable price volatility.

Asset management firm aims to extend offerings beyond ETF

Valkyrie’s application outlines a specific limit on the ETF’s investment in Ether futures contracts, capping it at 8,000 contracts per month to adhere to position limits set by the Chicago Mercantile Exchange. Should the SEC approve the application, investors would gain the opportunity to speculate on Ether’s future prices through the ETF.

Apart from Ether futures, the ETF plans to invest its remaining assets in cash, cash-like instruments, or high-quality securities. These include U.S. government-issued bills, notes, bonds, money market funds, and corporate debt securities.

Notably, Valkyrie is among several major asset management players seeking approval for an Ether futures ETF for U.S. investors. The others include Grayscale, VanEck, Bitwise, Volatility Shares, ProShares, and Round Hill Capital.

The influx of these applications reflects widespread anticipation that U.S. regulatory authorities might soon greenlight a Bitcoin ETF. Multiple investment giants, including BlackRock and Fidelity, are also awaiting regulatory clearance for their ETF offerings.