Asset managers continue to actively explore digital asset products, with Bitwise poised to launch trading for two Ethereum-themed ETFs next week.
The release of the two products is expected to enable investors to gain exposure to CME Ether futures through the widely popular and regulated ETF format for the first time.
Bitwise’s Ethereum-Themed ETFs
One of the crypto index fund managers – Bitwise – announced that the trading of the Bitwise Ethereum Strategy ETF (AETH) and the Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP) will begin on Monday, October 2nd.
The Bitwise Ethereum Strategy ETF invests in regulated CME Ether futures focused on front-month contracts, while the Bitwise Bitcoin and Ether Equal Weight Strategy ETF provides equal exposure to regulated CME Bitcoin Futures and CME Ether Futures. The custodian for both funds is the Bank of New York Mellon (BNY), with an expense ratio of 0.85% each.
The latest development follows Bitwise’s announcement of filing the amended registration statements for both ETFs with the Securities and Exchange Commission (SEC).
Highlighting Ethereum-based applications’ considerable progress in recent years, the San Francisco-based asset manager’s CIO Matt Hougan said the portfolio opportunity with Ethereum is broader than bitcoin. The exec asserted that some investors deem ETH an alternative, and others view it as a traditional growth investment while adding that the asset has “elements of both.”
While explaining Ethereum’s unique position in portfolios, Hougan also pointed out that the asset’s correlation to traditional equities over the last two years has remained low and trending lower.
Bitwise CEO Hunter Horsley also commented on the upcoming Ethereum-themed ETFs in a statement,
“Ethereum now has billions in revenue, millions of users, and thousands of distinct apps and developers. As the leading operating system for crypto, Ethereum has spread like wildfire. With blue-chip brands like Nike, Starbucks, Adidas, Pepsi, PayPal, JPMorgan, and others building and using applications on Ethereum, the momentum is only building. AETH and BTOP give investors the opportunity to participate in that growth with confidence through regulated ETFs.”
Spot ETFs Continue to Face Regulatory Gridlock
Besides Bitwise’s ETFs, Valkyrie Investments and VanEck are also anticipated to commence trading in Ethereum futures products next week. While it appears that the SEC is reportedly expediting Ethereum futures funds approvals, it has opted to postpone the processing of applications for similar funds tied to spot Ethereum.
As the fate of spot ETFs hangs in limbo, four US lawmakers have called upon the SEC to promptly approve one while arguing that it was illogical for the regulator to persist in prioritizing futures ETFs over spot products, as there was no clear distinction between the two.
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