Valkyrie Digital Assets, an asset management firm specializing in crypto-related products and services, has applied for a new futures exchange-traded fund (ETF) that will track the performance of the world's second-largest cryptocurrency, Ethereum.
Not much is known about the details of the fund, whose name is announced as Valkyrie Ethereum Strategy ETF.
Valkyrie is not new to the crypto ETF space. The company has previously applied for several Bitcoin-related ETFs, including a physically backed Bitcoin ETF, a Bitcoin futures ETF, and a Bitcoin balance sheet ETF. The last two of these have been approved by the SEC and are currently trading on the Nasdaq under the abbreviations BTF and BSTR, respectively.
Valkyrie is one of the few firms to apply for crypto ETFs in the US, under the direction of SEC Chairman Gary Gensler, who has stated that he prefers crypto futures-based ETFs over spot prices. Other firms include ProShares, Invesco, VanEck and Bitwise.
The launch of crypto ETFs in the US is seen as a major milestone for the industry as it provides greater access and legitimacy to crypto assets for individual and institutional investors.
However, some critics argue that futures-based ETFs are less efficient and more costly than spot-based ETFs and do not reflect the actual demand and supply of crypto assets.
The SEC has yet to approve any spot-based crypto ETFs in the US, citing concerns about market manipulation, custody, valuation, liquidity, and investor protection.
*Not investment advice.