Volatility Shares Plans Ground-Breaking ETF for Ether Futures

Volatility Shares, the company that introduced the first leveraged Bitcoin futures ETF, is planning to launch a ground-breaking ETF focused on Ether, the second-largest cryptocurrency by market capitalization.

The recent triumph of Volatility Shares’ 2x Bitcoin Strategy ETF (BITX), the nation’s first leveraged Bitcoin futures ETF, has paved the way for the company’s latest endeavor.

This exchange-traded fund seeks investment results that correspond to twice the daily excess return of the S&P CME Bitcoin Futures Daily Roll Index.

On July 28, Volatility Shares presented their proposal to the Securities and Exchange Commission for an ETF that monitors Ethereum futures.

This proposed ETF is intended to expose investors to digital assets by closely tracking the movement of Ethereum’s futures contracts.

Several other companies have joined the competition to introduce Ethereum futures ETFs, following Volatility Shares’ lead.

Grayscale Investments, Bitwise Asset Management, Direxion, and Roundhill Investments have all expressed interest in participating, but not all have followed through.

According to recent reports, six companies are seeking approval to launch Ethereum Futures ETFs.

Bitwise, Roundhill, VanEck, Proshares, and Grayscale submitted their applications on August 1 alongside Volatility Shares.

Notably, Roundhill Investments and VanEck submitted their Ethereum futures ETF applications on the same day, with experts speculating that Roundhill would prefer ETH futures to the increasingly congested Bitcoin Spot ETF market.

This strategic move may have been motivated by a desire to strengthen expertise in the metaverse or obtain an early advantage in the ETF Spot sector’s fierce competition.

Since its inception in 2018, Roundhill Investments, an SEC-registered investment advisor, has been an industry leader in providing inventive thematic ETFs.

If authorized, Ethereum Futures ETFs would provide investors with access to digital assets via Ethereum’s futures contracts, offering a more traditional investment vehicle that avoids the complexities of purchasing, storing, and securing actual Ether.

It understands the distinction between a BTC Spot ETF and an Ethereum Futures ETF.

In contrast to the former, which closely follows the price of physical Bitcoin, the latter derives its value from futures contracts.

Despite the potential advantages of a BTC Spot ETF, the SEC has not yet approved any applications for ETFs linked to Ethereum futures contracts, possibly due to concerns about Ether’s classification and liquidity levels.

As the SEC continues to deliberate on the BTC Spot ETF filings from industry titans such as BlackRock and Fidelity, other firms are exploring the Ethereum Futures ETF market.

As institutional interest in the crypto space grows, diversification of investment strategies in the cryptocurrency market has become a defining trend.