Valkyrie had filed its unique Ethereum ETF application with the SEC in August. The asset manager was looking to convert its existing Bitcoin Strategy ETF (BTF) into a combined Bitcoin and Ether futures ETF.
Ethereum futures exchange-traded funds (ETFs) are the latest trend in the cryptocurrency market, with institutional players changing lanes after the US Securities and Exchange Commission (SEC) delayed decisions on Bitcoin ETFs cash.
Asset management company Valkyrie, one of the pioneers of the first Ethereum ETF in the United States, has decided to pause the purchase of Ether futures contracts until the US Securities and Exchange Commission approves an Ether futures ETF.
This comes just a day after the asset manager reportedly gained approval to offer investors exposure to Ether futures under its existing ETF (BTF) strategy.
The SEC Could Be Behind This Action, Speculates a Bloomberg Expert
On Friday, September 29, Valkyrie filed a 497 with the SEC, saying it would stop purchasing Ether futures contracts and unwind its existing positions. A part of the file said:
“Effective immediately, the fund will not purchase Ether futures contracts until an amendment to the fund’s registration statement comes effective that provides for the addition of Ether futures contracts to the fund’s primary investment strategy. Until then, the fund will undo any existing positions in Ether futures contracts.”
As reported on Thursday, September 28, the SEC appears to be accelerating the approval of the Ethereum futures ETF in anticipation of a possible US government shutdown next week. Following this report, Valkyrie revealed that it had begun purchasing Ether futures contracts for its blended strategy ETF ahead of a possible launch next week.
However, this latest action raises questions about the chances of Valkyrie becoming one of the first companies to introduce an Ethereum ETF in the United States.
Bloomberg analyst Eric Balchunas has presented a possible reason for Valkyrie’s decision to stop and undo its Ether futures purchases. “The SEC must have threatened to take him down,” Balchunas speculated via a post on X (formerly Twitter).
Balchunas further added that: “The jockeying has begun in full as Valkyrie announcing they are buying Ether futures for $BTF today (ahead of formal name change on Tue). In related news, hearing that some issuers are ready to launch Monday morning, unclear how many yet, but at least a couple. Game on.”
Nine Ethereum ETFs Launching Next Week?
According to analysis by Eric Balchunas, around nine Ethereum ETFs will potentially begin trading on Monday, October 2. Notably, asset manager ProShares owns three of these funds, two of which are combined Bitcoin and Ethereum ETFs.
VanEck is another of the pioneers in creating the first Ether futures ETFs in the US. The investment manager recently announced his intention to donate 10% of the profits from his Ethereum ETF (EFUT) to The Protocol Guild, a compensation plan for top Ethereum contributors. VanEck wrote on X (formerly Twitter) the following:
“If TradFi stands to gain from the efforts of Ethereum’s core contributors, it makes sense that we also give back to their work. We urge other asset managers/ETF issuers to consider also giving back in the same way.”
The ETH price has seen some respite since news began circulating about the possible launch of the Ethereum ETF. Ether is valued at $1,676, reflecting a substantial 5% price increase over the past week.
By Audy Castaneda
