ProShares, a leading issuer of exchange-traded funds (ETFs), has officially filed a proposal to list and trade spot Ethereum (ETH) ETF shares on the New York Stock Exchange (NYSE). According to the filing with the United States Securities and Exchange Commission (SEC), the ProShares Ethereum ETF will utilize Coinbase Custody Trust Company for the custody of its ETH holdings.
The asset manager emphasized that neither the firm nor its associated parties will engage in activities related to Ethereum staking. This decision aligns with recent adjustments by potential spot Ethereum ETF issuers who have revised their 19b-4 and S-1 filings to exclude staking components. These revisions aim to address the SEC’s stance on staking for spot Ethereum ETFs. However, the exclusion of staking capabilities may dissuade some investors who seek the additional yield from staking rewards. Typically, investors who buy, hold, and stake ETH can earn staking rewards, resulting in extra yield. Excluding this feature means spot Ethereum ETFs will not offer these additional benefits to investors.
The SEC has a 45-day window, extendable to 90 days, from the notice publication date to respond to the filing. Given that ProShares filed for the spot ETH ETF on June 6, 2024, a decision could be expected by late July 2024.
This proposal follows ProShares’ recent introduction of two Ethereum-linked ETFs: the ProShares Ultra Ether ETF (ETHT) and the ProShares UltraShort Ether ETF (ETHD), which target 2x and -2x daily ETH returns, respectively. Both ETFs are set to be listed on the NYSE on Friday, June 7.
ProShares is notable for launching the first Bitcoin-linked ETF in 2021, the Bitcoin Strategy ETF (BITO), which invests in futures contracts. Unlike some major asset management firms such as BlackRock, Grayscale, and Fidelity, ProShares has not pursued a spot Bitcoin (BTC) ETF.
It is important to note that the approval of spot Ethereum ETFs requires approval for both the 19b-4 and the S-1 filings to be officially traded in the market. The approval in May was solely for the 19b-4. Analysts predict that the final approval for these ETFs might occur in July 2024.
These products are expected to provide investors with new levels of flexibility and strategic options, enabling more precise navigation of the volatile crypto market. Meanwhile, the Bitcoin ETF has attracted $2.4 billion after noting consecutive inflows for the last 15 days, as reported by Senior Bloomberg ETF analyst Eric Balchunas in a recent X post.
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