Ethereum, the second-largest cryptocurrency by market capitalization, is poised for a significant development in the United States. Ethereum futures exchange-traded funds (ETFs) may soon debut in the country, with analysts suggesting that trading could commence as early as next week. This anticipated launch comes as a response to the possibility of a U.S. government shutdown, which is driving regulators to expedite their decision-making processes.
Fast-Tracking ETF Approvals: On September 28, Bloomberg Intelligence analyst James Seyffart hinted at the likelihood of the U.S. Securities and Exchange Commission (SEC) greenlighting multiple Ethereum futures ETFs soon. His statement followed comments from ETF analyst Eric Balchunas, who indicated that the SEC is keen on accelerating the introduction of Ether futures ETFs.
Looking like the SEC is gonna let a bunch #Ethereum futures ETFs go next week potentially https://t.co/YoBD1d1ay8
— James Seyffart (@JSeyff) September 28, 2023
The motivation behind this accelerated timeline, Balchunas suggested, is the desire to clear the regulatory slate before a potential government shutdown. According to reports, various ETF applicants were urged to update their documentation by Friday afternoon to facilitate trading as early as the following Tuesday.
Government Shutdown Looms: The impending U.S. government shutdown, expected to take effect on October 1 if Congress fails to reach an agreement or provide funding for the new fiscal year, has added urgency to regulatory decision-making. This shutdown is anticipated to impact various federal agencies, including financial regulators.
A Crowded Queue: Currently, there are 15 Ethereum futures ETFs from nine issuers awaiting approval, as highlighted by analysts in a September 27 report. Notable companies seeking to introduce Ethereum futures or hybrid ETF products include VanEck, ProShares, Grayscale, Volatility Shares, Bitwise, Direxion, and Roundhill.
High Probability of Launch: The analysts behind this development estimate a 90% likelihood of Ethereum futures ETFs being launched in October. Valkyrie’s Bitcoin futures product (BTF) is poised to be among the first to offer exposure to Ethereum, with a planned launch date of October 3.
Market Reaction: Although this development has generated significant anticipation within the crypto community, Ethereum’s price reaction has subdued. At the time of writing, Ethereum’s price has registered a modest 1% gain, hovering slightly above the $1,600 mark.
While the cryptocurrency community eagerly awaits the introduction of Ethereum futures ETFs, it’s important to note that these products are not as highly anticipated as their spot-based counterparts. Notably, the United States has already seen the introduction of Bitcoin futures ETFs in 2021, marking a significant step in the evolution of crypto investment products.
