Unpacking the Quiet Rollout of Ethereum Futures ETFs on CBOE

Last Updated October 3rd 2023
3 Min Read

Key Takeaways -

  • Nine Ethereum futures ETFs debuted on the CBOE, but initial trading volumes were lower than expected, reaching just under $2 million.
  • Unlike traditional crypto ETFs, these new funds aim to track Ethereum's future valuations, serving as a precursor to spot crypto ETFs.
  • VanEck's ETF offers tax benefits and has committed to donating 10% of its profits to Ethereum's core developers, setting it apart from other offerings.

This Monday was a monumental day for the cryptocurrency market in the United States. The Chicago Board Options Exchange (CBOE) welcomed the launch of nine Ethereum futures Exchange-Traded Funds (ETFs). Despite the significance, the market's initial enthusiasm was noticeably muted, particularly when contrasted with the buzz surrounding last year's ProShares Strategy ETF introduction.

The Investment Giants: Who's Behind the Curtain

A consortium of investment giants, including ProShares, Bitwise, VanEck, Valkyrie, Volshares, and Hashdex, led this groundbreaking initiative. ProShares took the spotlight by rolling out three unique funds: Ether Strategy Fund (EETH), Bitcoin and Ether Strategy ETF (BETH), and Bitcoin and Ether Equal Strategy ETF (BETE). Other key players like Bitwise and VanEck also contributed their Ethereum Strategy ETFs to the mix.

Initial Trading Volumes

The market showed a cautious appetite for these novel ETFs. Eric Balchunas, an analyst from Bloomberg Intelligence, reported that the trading volumes barely touched $2 million by 11:25 a.m. ET. Among these, Valkyrie's Bitcoin and Ether Strategy ETF (BTF) was the frontrunner, accounting for approximately $787,000 in traded shares.

The Unique Selling Points

These ETFs diverge from the norm in the crypto investment landscape. Rather than mirroring Ethereum's current market price, they are designed to track its future value. This unique focus is considered a precursor to the introduction of spot crypto ETFs, which would enable direct investment in cryptocurrencies at their current prices without the need for asset ownership.

Upcoming Developments

Grayscale is also stepping into the spotlight, with plans to transform its existing Ethereum Trust into a spot Ethereum ETF. The firm has already set the wheels in motion by submitting the required documentation to the Securities and Exchange Commission (SEC).

Special Features

VanEck's ETF, identified by the ticker EFUT, is engineered to invest in ether futures contracts. It also offers the allure of tax advantages for long-term investors, thanks to its C-Corp structure. A standout feature is VanEck's pledge to donate 10% of all profits from this ETF to Ethereum's core developers for the coming decade.

Where Does Ethereum Stand Now

Where Does Ethereum Stand Now

As of writing, Ethereum is trading at $1,664. It had a modest 24-hour rally of 0.5% and a nearly 7% increase over the past week.

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