The SEC is preparing to consider approving Ethereum futures ETF

The U.S. Securities and Exchange Commission (SEC) recently announced that it will begin considering the approval of applications for Ethereum futures exchange-traded funds (ETFs). This follows the approval of the first batch of Bitcoin futures ETFs in October of last year, signaling further openness by the SEC towards cryptocurrency ETFs.

Currently, six institutions have submitted applications to the SEC for Ethereum futures ETFs. These include Grayscale, VanEck, Bitwise, Volatility Shares, ProShares, and Round Hill Capital. These applications are all based on Ethereum futures contracts traded on the Chicago Mercantile Exchange (CME), rather than direct ownership of Ethereum. Among these, ProShares has proposed an inverse-strategy Ethereum futures ETF, aimed at allowing investors to profit from a decrease in Ethereum's price.

If these applications are approved by the SEC, the U.S. could see its first Ethereum futures ETF as early as October of this year. This would provide investors with a more convenient, cost-effective, and transparent way to participate in the Ethereum market. Ethereum is currently the second-largest cryptocurrency by market capitalization and serves as the foundational platform for many decentralized applications and smart contracts.

However, SEC approval for cryptocurrency ETFs is not a straightforward process. SEC Chairman Gary Gensler has repeatedly expressed concerns about regulating the cryptocurrency market and protecting investors, particularly against risks of fraud and manipulation. He has also emphasized the need for comprehensive surveillance-sharing agreements with regulated markets.