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 U.S. Securities and Exchange Commission (SEC) on Monday, the Kelly Ethereum Ether Strategy ETF will invest in cash-settled Ether futures contracts traded on the Chicago Mercantile Exchange (CME).
Bloomberg’s chief ETF analyst Eric Balchunas noted on Twitter Tuesday that Kelly’s Ether ETF could have a 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. The SEC asked them to withdraw it. It’s now 3 months (and 3 successful Bitcoin ETF Futures ETF launches) later. “
Balchunas added that Kelly’s ETF would have a 1% approval rating if rumors are true that the SEC has asked VanEck and ProShares to withdraw their respective Ether ETF filings as they offer exposure to crypto assets other than BTC .
I just had a quick chat with @JSeyff and our early, rough chance of approving this ETF is around 20%, unless this @ twobitidiot rumor is correct then we would obviously go 1% lower (although we still see multiple 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 because it tacitly signals 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 due to the fact that the SEC only used bitcoin ETFs Approved with a 100% exposure to Bitcoin futures.
Invesco’s ETF set out to deliver a mix of futures swaps, physical bitcoin and private funds in the bitcoin industry.
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