The largest digital asset manager, Grayscale Investments, filed paperwork with the U.S. Securities and Exchange Commission (SEC) on September 19 for a new exchange-traded fund dedicated to ethereum (ETH) futures. The Grayscale Ethereum Futures Trust will hold ethereum futures contracts for the fund.
Grayscale Investments Submits Ethereum Futures ETF Proposal to SEC
Grayscale has approached the SEC with a new Form 19b-4 filing seeking permission to list an ethereum futures ETF on the New York Stock Exchange (NYSE) Arca. The digital asset manager wants to use ethereum futures contracts for its ETF.
There are two types of ethereum futures contracts available on the CME trading platform. One represents 50 ETH (called “ETH contracts”) and the other represents 0.10 ether (called “MET contracts”). These contracts let investors bet on ethereum’s future prices without actually owning the cryptocurrency.
They work like other traditional futures contracts, letting investors either protect their investments or speculate on ethereum’s price changes. Grayscale’s ETF aims to reflect the daily price changes of the two closest expiring ETH contracts. The Form 19b-4 filing adds:
The trust will deposit an initial margin amount to initiate an open position in futures contracts. A margin deposit is like a cash performance bond. It helps assure the trader’s performance of the futures contracts that he or she purchases or sells.
Grayscale recently won a verdict from the D.C. Circuit Court that chastised the securities regulator for denying the Grayscale spot bitcoin ETF application. Following the verdict, Grayscale’s lawyers pushed the SEC to approve Grayscale’s spot bitcoin ETF “expeditiously.”
In the latest filing with the SEC, Grayscale highlights that CME stands as a regulated futures exchange, bolstered by oversight, checks, and regulatory vigilance. The filing insists that such measures ensure the fair and transparent trading of its offerings, notably including the ETH contracts and MET contracts.
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