A lesser-known group of Ether (ETH) ETF applications is closely trailing the wave of Bitcoin (BTC) spot ETF applications that have recently caused excitement in the cryptocurrency market.
The U.S. Securities and Exchange Commission (SEC) is currently reviewing 14 applications for Ethereum futures ETFs that are in some form listed in the U.S. federal register as of August 10. That is more than the nine Bitcoin spot ETF applications currently on the waiting list.
The increase in applications coincides with rumours that the SEC is “ready” to approve an Ether futures ETF. Sources told Fortune that after receiving a call from SEC employees stating that they were prepared to assess their application, several companies decided to refile.
According to the general counsel for a different project, SEC staff told them in May that Ether was still a little too young to be approved for a futures ETF. Nevertheless, the company made the decision to reapply after witnessing other candidates do so.
Similar to the first source, the SEC then called the company and stated that while it would consider the application in “ordinary course,” it could not promise that the ETF would be approved. The SEC’s messaging, according to the general counsel, appeared “schizophrenic.”
The SEC’s Reasons for Changing Course
The Volatility Shares ETF business, which received an unexpected listing for a leveraged Bitcoin futures ETF in late June, may be to blame for the SEC’s recent muddled messaging.
The decision was roundly criticised by the crypto investment community, which felt it showed the SEC’s hypocrisy in rejecting products for crypto spot ETFs that seemed to carry less risk.
According to a person with knowledge of the situation, the agency at the time requested that the corporation withdraw its application. Volatility Shares, on the other hand, declined since its product already fell under a pre-existing structure and didn’t require the explicit consent of the SEC in order to be listed.
On July 28, Volatility Shares again rejected the SEC’s order to withdraw the application and instead applied for an Ethereum futures ETF. According to the source, this prompted the SEC to let other applicants know that it was prepared to consider their plans.
According to Bloomberg ETF analysts James Seyffart and Eric Balcunas, there is a 75% chance that an Ether futures ETF will be approved by year’s end, compared to a 65% chance for a Bitcoin spot ETF.