The US Securities and Exchange Commission (SEC) has recently approved Ethereum exchange-traded funds (ETFs). This means that Ethereum is now officially considered a non-security, according to former CFTC Chairman and Head of Policy at a16z Crypto, Brian Quintenz.
On October 2, a total of nine ETF products were released on the market with the intention of tracking futures contracts linked to the value of Ether, the native currency of Ethereum.
The remaining four follow a mix of Bitcoin and Ethereum futures contracts, while five of them own only ether futures.
Additionally, Grayscale wants to turn its Ethereum Trust into a spot Ethereum ETF.
Less than $2 million worth of trading was done in Ethereum ETFs on day 1.
With a total trading volume of $880,000, Valkyrie’s BTF, which follows a combination of Bitcoin and Ether, leads the pack of recently released ETFs.
It’s important to note that BTF changed its strategy to add Ethereum after initially trading as a Bitcoin-only futures ETF in October 2021.
It is evident that Ethereum’s adoption has been more muted when comparing the inaugural trading volume of these Ether ETFs to the launch of the ProShares Bitcoin Strategy ETF (BITO) in October 2021.
On its first day, BITO had a trade volume of more than $1 billion.
Senior Bloomberg ETF analyst Eric Balchunas noted that although the trading volume of the Ether ETFs may appear low, it is actually quite high when compared to the launch of a conventional financial ETF.
However, he pointed out that buyers of spot ETFs often favour them over those built on futures contracts.
Balchunas also emphasised the SEC’s choice to release each of these ETF products on the same day in an effort to prevent any one fund from dominating the market.
Volatility Shares has no plans to list an ETH futures ETF.
Despite the rising demand for Ethereum futures and ETFs, several businesses are hesitant to enter this market.
A recent cancellation of a comparable product’s listing by Volatility Shares, an ETF provider, was due to a lack of prospects in the present market.
The introduction of Ethereum ETFs represents a significant regulatory advancement as the cryptocurrency economy continues to flourish.
The previous CFTC head expressed the following opinions:
The fact that it took this long to happen is absurd and offensive, but it represents a significant victory for the cryptocurrency industry and, more significantly, for the future of the internet.