On September 19, Grayscale Investments, the largest digital asset manager, submitted papers to the U.S. Securities and Exchange Commission (SEC) for a new exchange-traded fund devoted to ethereum (ETH) futures. The fund's ethereum futures contracts will be held by the Grayscale Ethereum Futures Trust.
Ethereum Futures ETF Proposal Submitted by Grayscale Investments to SEC
Grayscale has submitted a new Form 19b-4 file to the SEC asking for approval to establish an ethereum futures ETF on the NYSE Arca. For its ETF, the digital asset management intends to use ethereum futures contracts.
The CME trading platform offers two different kinds of ethereum futures contracts. One of them stands for 50 ETH (referred to as "ETH contracts"), and the other for 0.10 ETH (referred to as "MET contracts"). These agreements allow investors to speculate on the price of ethereum without really owning it.
They function like other conventional futures contracts, allowing investors to hedge their funds or make predictions about how much ethereum will cost in the future. The daily price movements of the two closest ETH contracts that are about to expire should be reflected in Grayscale's ETF. The filing of Form 19b-4 includes:
To begin an open position in futures contracts, the trust will deposit an initial margin amount. Similar to a cash performance bond is a margin deposit. It aids in guaranteeing the trader's success with the futures contracts that he or she buys or sells.
In a recent decision, the D.C. Circuit Court criticized the securities authority for rejecting Grayscale's application for a spot bitcoin ETF. Following the ruling, Grayscale's attorneys urged the SEC to "expeditiously" approve Grayscale's spot bitcoin ETF.
Grayscale emphasizes that CME is a regulated futures exchange, supported by control, checks, and regulatory vigilance, in its most recent filing with the SEC. The petition believes that such actions will guarantee the honest and open trading of its products, particularly the ETH and MET contracts.
How do you feel about Grayscale's most recent SEC application for an ethereum futures ETF? Post your ideas and viewpoints on this topic in the comments area below.