The first Ethereum Futures ETFs have been launched in the United States, enabling investors to bet on the price of Ether without having to hold it directly. However, their launch was more modest than that of the Bitcoin ETFs, with an initial volume of just over $1.7 million. Nevertheless, this launch marks an important milestone in the adoption of cryptocurrencies in traditional financial markets.
The very first Ethereum Futures ETFs are on the US market
While Valkyrie received the green light from the Securities and Exchange Commission (SEC) for its Ethereum Futures ETF last Friday, a total of 9 ETFs in this family were launched today. This is a major step forward for ETFs in the USA, as these are the very first Ethereum Futures ETFs authorized by the American regulator.
Some, like Valkyrie’s, are mixed ETFs, offering exposure to both Ether and Bitcoin, as is also the case with ETFs offered by ProShares and Bitwise. Others are entirely dedicated to Ether, such as one from VanEck, one from ProShares, one from Bitwise, one from Kelly and one from VolShares.
According to Michael L. Sapir, CEO of ProShares, these ETFs will provide a route to democratization for a portion of investors reluctant to the idea of having to hold on to their crypto-currencies :
“We believe that many investors who are interested in crypto-currencies but concerned about the risks associated with custody, or who face the learning curve and complexity required to buy them directly, will be attracted to our crypto-linked ETFs. “
Effectively, an ETF is a purely speculative tool: in the case of cryptocurrencies, it allows investors to bet on the rise or fall of an asset such as Bitcoin or Ether without actually owning it. Just like traditional stocks, ETFs are listed on the stock exchange to be traded on the market.
A rather timid launch
As Eric Balchunas, ETF analyst at Bloomberg, points out, the launch of the Ethereum Futures ETFs we’re talking about was, however, observed with rather limited gusto. Indeed, as of 3:30pm, they had a total volume of just over $1.7 million :
Pretty meh volume for the Ether Futures ETFs as a group, a little under $2m, about normal for a new ETF but vs $BITO (which did $200m in first 15min) it is low. Tight race bt VanEck and ProShares in the single eth lane. pic.twitter.com/F9AHtrVcVf
– Eric Balchunas (@EricBalchunas) October 2, 2023
By way of comparison, the launch of ProShares’ Bitcoin ETF (ProShares Bitcoin Strategy ETF), traded on the NYSE Arca exchange under the ticker $BITO, was accompanied by $200 million in volume generated in just a quarter of an hour after its launch.
However, it’s worth noting that the latter was launched at the height of the bull run, so the appeal of crypto-currencies was undeniably greater at the time. What’s more, Bitcoin enjoys the status of king of the crypto-currencies, and its aura remains greater than that of Ether, despite being the second most capitalized crypto on the market.
According to Eric Balchunas’ estimates, ETFs are likely to exceed $6 or even $7 million in volume on the day. If we compare this figure with the various ETFs that may be launched in the United States, however, it reflects a good start for the first Ethereum Futures ETFs.