Denver-based investment firm Kelly Strategic Management has filed for an exchange traded fund (ETF) that offers exposure to Ethereum (ETH) futures contracts.
The move comes just three months after VanEck and ProShares suddenly withdrew their ETH Futures ETF applications on the same day in August.
According to a filing with the SEC on November 29, the Kelly Ethereum Ether Strategy ETF will invest in cash-settled Ether futures contracts traded on the Chicago Mercantile Exchange (CME).
Bloomberg senior ETF analyst Eric Balchunas stated on Twitter today that Kelly’s Ether ETF may have a slim 20% chance of approval when he questioned whether the “SEC is ready for this new move.”
According to Balchunas, SEC chairman Gary Gensler is “mentally unwilling” to approve anything other than a Bitcoin (BTC) futures ETF at this point:
“During the registration process for Bitcoin futures in August, VanEck and ProShares also applied for Ether ETFs. SEC asked them to withdraw them. It’s now 3 months (and 3 successful Bitcoin ETF Futures ETF launches) later. “
Balchunas added that if the rumors are true that the SEC asked VanEck and ProShares to withdraw their respective Ether ETF filings due to exposure to crypto assets other than BTC, Kelly’s ETF has a 1% chance of approval would have.
I just had a quick chat with @JSeyff and our early, rough chance of this ETF getting approved is around 20% unless this @ twobitidiot rumor is correct then we would obviously go 1% lower ( although we are still seeing several ETFs holding $) ETHE) https://t.co/Ba4yRMsGS6
– Eric Balchunas (@EricBalchunas) November 29, 2021
Researcher Jason Lowery commented, “I would be surprised if the SEC approves an ETH ETF by tacitly signaling the acceptance of ETH as not an unregistered security.”
Related: CME introduces Micro-Ether-Futures when ETH ATH is above 4.4K. approaching
The SEC approved several BTC futures ETFs in the second half of 2021, but it appears that the regulator is currently unwilling to sign any type of fund that has exposure to cryptocurrencies outside of CME-BTC futures- Offers contracts.
Earlier this month, Anna Paglia, global head of ETFs and indexed strategies at Invesco, highlighted this when she stated that her company’s decision to withdraw its BTC futures ETF was for the SEC to only use Bitcoin ETFs 100% exposure to Bitcoin futures approved.
Invesco’s ETF aimed to provide a mix of futures swaps, physical bitcoin and private funds in the bitcoin industry.
