An Ethereum Exchange Traded Fund (ETF) was filed by asset manager VanEck Digital Assets, as per a Form S-1 filed with the U.S. Securities and Exchange Commission (SEC). If this ETF will get approved, it would trade on the exchange Cboe BZX and it would be known as VanEck Ethereum Trust.
The document filed with the SEC lays out the entire roadmap VanEck has planned out for Ethereum. As per the document, this investment products is meant to track the MVSI CryptoCompare Ethereum Benchmark Rate. It would also hold physical ETH and the Delaware Trust Company has been appointed by VanEck as Custodian.
The document points out that since the custodian holds physical ETH, if this cryptocurrency trades downwards, VanEck is expected to redeem or sell more shares. Selling the ETH is out of the question. Part of the document points out that “In seeking to achieve its investment objective, the Trust will hold Ether (“ETH”) and will value its Shares daily based on the reported MVIS® CryptoCompare Ethereum Benchmark Rate.”
VanEck also filed for a Bitcoin ETF with the SEC but the regulator announced that the decision will take time to come to fruition. The asset manager has not had a good history with the regulator as the latter has been rejecting these petitions, not only VanEck’s. It is good to note that the current petition is different from what has been happening in the past and looks more promising.
A former MIT professor with a course on cryptocurrencies and blockchain, Gary Gensler, has been confirmed by the U.S. Senate as Chairman. Compared to his predecessors, his position looks more pragmatic and flexible. The petition is now in the hands of the regulator; it is up to them to evaluate this petition and make a ruling, either against or in favor of it. Going by the past tendencies of the SEC, they get an extended period to issue a ruling, which they always use.
As VanEck’s petition is in the works, Canada is seeing a frenzy of Crypto ETFs according to Erick Balchunas, a Senior ETF Analyst for Bloomberg Intelligence. When the country approved a series of Ethereum and Bitcoin ETFs, their trading volumes have been on an upward trend in the past weeks.
Canada going crazy for crypto. Thought the story would be $ETHX's record smashing volume but no, the 3iQ Bitcoin ETF came out of nowhere to trade $200m, most in country. Likely (another) massive creation. It's already up to $600m aum (equiv of $16b in US lol) pic.twitter.com/e2OCoaawH8
— Eric Balchunas (@EricBalchunas) May 4, 2021
These skyrocketing volumes can be attributed to ETH gaining attention from institutional investors in the past weeks. Within this period, Ether’s price has responded accordingly and reached a new all-time high.
ETHUSD Chart Obtained from Tradingview.com
The chart above shows how ETH has been conquering new heights in the past few weeks, trading over $4,038 rigth now.
Image courtesy of Pixabay
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