Grayscale files new application for Ethereum futures ETF

Grayscale Investments logo. – CC BY-SA

Grayscale Investments has submitted a new application to the U.S. Securities and Exchange Commission (SEC) for an Ethereum futures Exchange-Traded Fund (ETF). Notably, this application falls under the Securities Act of 1933 and is typically used for commodities and Bitcoin ETFs.

In contrast, Grayscale’s previous application for an Ethereum Futures ETF was filed under the Investment Company Act of 1940, a framework commonly used for most securities-based ETFs, alongside applications from five other firms.

The specific reasons behind Grayscale’s decision to file a separate application under a different regulatory act are unclear.

Grayscale’s recent application follows a legal victory against the SEC, where a federal judge overturned the SEC’s decision to block Grayscale from converting its Bitcoin trust into a spot ETF.

The SEC’s recent approval of certain Bitcoin futures ETFs, beginning around October 2021, has created a favorable environment for asset managers considering Ethereum futures ETFs.

This trend is gaining traction, with numerous asset management companies entering the field. In recent weeks, entities such as VolatilityShares, Bitwise, ProShares, VanEck, Roundhill and Valkyrie Investments have all submitted applications for Ethereum futures ETFs. Additionally, The Wall Street Journal recently mentioned Hashdex as another applicant, bringing the total number of applicants to at least 12.

A crypto ETF offers a safer way for traditional investors to get into the asset. ETFs let people buy shares that follow the asset’s price, so a Bitcoin ETF allows investors to invest in it without the hassle of securing and storing their cryptocurrency holdings.

Ethereum futures ETFs’ possible launch in October

Eric Balchunas, a senior ETF analyst at Bloomberg, recently shared on Twitter that VolatilityShares plans to launch an Ethereum futures ETF on October 12. This would make it one or two days earlier than other ETFs, following the 75-day rule.

Six applications for Ethereum ETFs have been submitted, and the SEC seems open to their development. Sources suggest that these ETFs’ approval could happen as early as October.

The companies seeking approval for these ETFs include Ether Strategy ETF, Bitwise Ethereum Strategy ETF, Roundhill Ether Strategy ETF, VanEck’s Ethereum Strategy ETF, ProShares Short Ether Strategy ETF and Grayscale Ethereum Futures ETF.

However, the SEC has not made any official comments, and it’s unclear which of these firms will receive initial approvals.

Meanwhile, Bloomberg ETF analysts James Seyffart and Balchunas believe that Ethereum futures ETFs might launch before a spot Bitcoin ETF.

They suggested that the probability of the U.S. SEC approving a spot Bitcoin ETF this year has recently increased from 50 percent to 65 percent. In contrast, the likelihood of an Ethereum ETF approval has reached 75 percent. Balchunas is even more optimistic, predicting a 95 percent chance of Ether futures approval.

Surge in Ethereum’s market value

Following recent selling pressure, Ethereum’s price has rebounded and is currently hovering around $1,634 with a market cap of $196 billion. Analysts believe that Ethereum can maintain support levels between $1,600 and $1,630. It might consolidate, potentially reaching an upper limit of around $1,700 before possibly surpassing $2,000.

An analysis of the Moving Average Convergence Divergence (MACD) indicator suggests that Ethereum could engage in sideways trading until it breaks the immediate resistance at $1,632, marked by the 100-day Exponential Moving Average (EMA) in blue.

The 50-day EMA is sitting at $1,623, offering confidence to buyers, especially within the congestion zones at $1,600 and $1,530.

Traders are advised to watch for a buy signal, which may occur when the blue MACD line crosses above the red signal line on the four-hour chart. This might suggest a good time to place new buy orders or consider additional purchases.