Direxion and ProShares have recently submitted applications for Exchange-Traded Funds (ETFs) that, if approved, would hold futures contracts linked to both bitcoin and ether (BTC and ETH). This move comes shortly after other fund groups unveiled their intentions to launch ETFs solely focused on ETH futures. The U.S. Securities and Exchange Commission (SEC) is now presented with a different kind of crypto-centric investment product, signaling a potential shift in its previous stance.
Industry sources reveal that the SEC has indicated its readiness to publicly consider the introduction of an ETF based on ether futures, indicating a notable change from their earlier position in May. Notably, the SEC allowed ETFs holding bitcoin futures contracts to enter the market in 2021, and these products have been well-received by investors. Given this precedent, many market participants question the apparent discrepancy in treatment between BTC and ETH futures ETFs.
Apart from ProShares and Direxion, several other companies, including Volatility Shares, Grayscale Investments, VanEck, Bitwise, and Roundhill Investments, have also filed for ETH futures ETFs in the past week. The race to launch such products reflects the growing demand from investors to gain exposure to the cryptocurrency market through familiar investment vehicles like ETFs.
With the SEC repeatedly rejecting proposals for a spot bitcoin ETF, fund issuers have been compelled to explore alternative and innovative ways to provide investors with crypto exposure. By combining an investment type already approved for US ETFs (bitcoin futures contracts) with one yet to receive regulatory approval (ether futures contracts), ProShares and Direxion are attempting to create new avenues for investors to participate in the crypto market.
For Forex traders and investors, the introduction of BTC and ETH futures ETFs could have significant implications. As more investment products are introduced in the crypto space, the overall liquidity and volatility of the Forex market may experience fluctuations. Traders should keep a close eye on these developments as they may influence currency pairings and trading strategies. The approval of these ETFs could also lead to increased interest and participation from traditional investors in the Forex market, as they seek exposure to the crypto market through regulated and familiar instruments. However, it's important to note that the SEC's final decision on the ETF proposals remains uncertain, and traders should exercise caution and stay informed about regulatory updates before making any trading decisions related to these assets.