The Valkyrie Ethereum Strategy ETF would be the first ETF in the United States to invest in Ether futures. Ether is the native cryptocurrency of the Ethereum blockchain, and it is the second-largest cryptocurrency by market capitalization.
The ETF would be managed by Valkyrie Investments, a New York-based asset management firm that specializes in digital assets. The fund would track the performance of the Bloomberg Galaxy Ethereum Futures Index, which is a measure of the price of Ether futures contracts.
The filing with the SEC comes at a time when there is growing interest in Ethereum futures. In recent months, the volume of trading in Ether futures has increased significantly. This is likely due to the increasing institutional interest in Ethereum.
The approval of the Valkyrie Ethereum Strategy ETF would be a significant milestone for the crypto space. It would be the first ETF in the United States to invest in a major cryptocurrency, and it would provide investors with a more convenient way to gain exposure to Ethereum.
However, it is important to note that the SEC has not yet approved the Valkyrie Ethereum Strategy ETF. The filing is just the first step in the approval process. The SEC could still reject the filing, or it could approve the fund with modifications.
It is also important to note that the performance of the ETF would depend on the performance of Ether futures. If the price of Ether futures falls, the value of the ETF would also fall.
Overall, the filing of the Valkyrie Ethereum Strategy ETF is a positive development for the crypto space. It shows that the SEC is considering approving ETFs that invest in cryptocurrencies, and it could pave the way for more ETFs to be approved in the future.
The Valkyrie Ethereum Strategy ETF will be a managed fund, which means that it will be actively managed by a team of investment professionals. This is in contrast to a passive fund, which simply tracks an index.
The fund will invest in Ether futures contracts, which are contracts that give the holder the right to buy or sell Ether at a specified price on a specified date. The fund will also invest in collateral investments, which are assets that are held by the fund to secure the futures contracts.
The Valkyrie Ethereum Strategy ETF will be subject to the same risks as Ether and Ether futures contracts. These risks include:
- Volatility: The price of Ether and Ether futures contracts can be very volatile, meaning that they can fluctuate significantly in a short period of time.
- Liquidity: The market for Ether and Ether futures contracts is not as liquid as the market for traditional assets, such as stocks and bonds. This means that it can be difficult to buy or sell Ether and Ether futures contracts at a fair price.
- Counterparty risk: The fund is exposed to counterparty risk, which is the risk that the counterparty to the futures contract will default on its obligations.
The Valkyrie Ethereum Strategy ETF is a new and innovative product that could provide investors with exposure to Ethereum in a more convenient way. However, it is important to be aware of the risks associated with this investment before investing.
Valkyrie Funds has already introduced a Bitcoin Strategy ETF and a Bitcoin Miners ETF to the market. These funds have been well-received by investors, and they have helped to increase the accessibility of Bitcoin and other cryptocurrencies to a wider audience.
The launch of the Valkyrie Ethereum Strategy ETF could help to further legitimize Ethereum and the wider crypto space. It could also lead to more institutional investment in cryptocurrencies.
EU’s First Spot Bitcoin ETF Goes Live
The launch of Europe’s first spot Bitcoin ETF is a significant development for the crypto space. It shows that regulators in Europe are more open to the idea of Bitcoin ETFs than regulators in the United States.
The Jacobi Bitcoin ETF is a passively managed fund that tracks the price of Bitcoin. It is the first ETF in Europe to invest directly in Bitcoin, rather than Bitcoin futures. This means that investors in the Jacobi Bitcoin ETF will own actual Bitcoin, rather than a derivative product.
The Jacobi Bitcoin ETF is listed on the Euronext Amsterdam Exchange and charges a management fee of 1.5%. It is available to investors in Europe and other jurisdictions that allow the trading of Bitcoin ETFs.
The launch of the Jacobi Bitcoin ETF comes amid a surge in applications for Bitcoin ETFs in the United States. In June, asset management firm BlackRock filed paperwork for a spot Bitcoin ETF, prompting other players like Invesco and Wisdom Tree to follow suit or reapply for their own Bitcoin ETF products.
The Chicago Board Options Exchange (CBOE) also filed a bid with the SEC on behalf of Fidelity for a spot Bitcoin ETF.
However, the filings were returned by the SEC due to their lack of clarity and comprehensiveness. The SEC has yet to approve a fund directly investing in Bitcoin.
The SEC’s reluctance to approve Bitcoin ETFs has been a source of frustration for many in the crypto community. However, the launch of the Jacobi Bitcoin ETF in Europe could put pressure on the SEC to approve similar products in the United States.
The approval of a Bitcoin ETF in the United States would be a major milestone for the crypto space. It would make it easier for investors to get exposure to Bitcoin and could help to legitimize the cryptocurrency.
Only time will tell whether the SEC will approve a Bitcoin ETF in the United States. However, the launch of the Jacobi Bitcoin ETF in Europe is a positive development for the crypto space and could pave the way for more Bitcoin ETFs to be approved in the future.
The SEC has cited a number of reasons for its reluctance to approve a Bitcoin spot ETF. These include:
- The lack of a regulated market for Bitcoin: The SEC is concerned that there is not enough transparency and oversight of the Bitcoin market. This makes it difficult to detect and prevent fraud and market manipulation.
- The volatility of Bitcoin: The price of Bitcoin is highly volatile, which could make it difficult for investors to get a fair price for their investments.
- The lack of a central authority: Bitcoin is not issued or backed by any central authority, which makes it difficult for the SEC to regulate.
The absence of a Bitcoin spot ETF has led to the growth of OTC products like Grayscale’s Bitcoin Trust (GBTC). These OTC products are more expensive, illiquid, and inefficient compared to ETFs. They also do not offer the same level of investor protection.
The SEC’s reluctance to approve a Bitcoin spot ETF has been criticized by some in the crypto community. They argue that the SEC is being too cautious and that a Bitcoin spot ETF would be a safe and regulated way for investors to get exposure to Bitcoin.
The SEC has said that it is still considering the issue of Bitcoin spot ETFs and that it will make a decision based on the facts and the law. It is possible that the SEC could approve a Bitcoin spot ETF in the future, but it is also possible that the SEC could continue to reject applications.
