In a strategic move that mirrors recent actions by Valkyrie Funds, Bitwise Invest has submitted an updated prospectus to convert its Bitcoin Futures ETF (BITC) into the “Bitwise Bitcoin and Ethereum Equalweight ETF Strategy.” The switch, which is set to take effect on October 9, 2023, is seen by many as a tactician in the race to create the first Ethereum futures ETF in the US.
Bitwise skips the Ethereum ETF queue
James Seifart, Bloomberg ETF Analyst, notice Regarding the development, he says: “Bitwise Invest just submitted an updated prospectus to change BITC from a Bitcoin futures ETF to a Bitwise Bitcoin and Ether Equal Weight Strategy ETF. This is like the move Valkyrie Funds pulled a few days ago. The actual date here would be 10/ 9/23″. Seyvart had previously commented on Valkyrie’s decision, describing it as a “3D chess move” if it proves successful.
The US Securities and Exchange Commission (SEC) currently has 15 Ethereum futures ETFs awaiting a decision. This includes 13 new applications for initial approval and two transfers, Bitwise and Valkyrie. Both companies seem to be trying to bypass the traditional queue, aiming to achieve the coveted first-mover advantage with their conversions. As the days go by, the likelihood of these ETFs receiving the green light from the Securities and Exchange Commission appears to be on an upward trend.
Seifart further commented on the evolving landscape, “We’re in new territory. It’s been 13 days since stocks were the first flops in a wave of Ethereum futures ETF filings. Back in 2021, it was just two days before forced withdrawals for Ethereum.” SEC and that was just 7 days ago in May of this year. The possibilities of a launch are getting bigger as time goes on.”
Eric Balchonas, senior ETF analyst at Bloomberg, weighed in on the situation, observing, “Bitwise is pulling Valkyrie that pulled MJ (using a name/strategy change to bypass the initial deposit and in this case exit early). The cannon run is in effect.”
He also noted the historical context, adding: “In the past, the SEC has required Ethereum Futures ETF providers to withdraw 5-6 days after the first hit. We are now on day 13 and no withdrawals. The house is not yet free but A very good sign. As we expected, these markets are likely to hit mid-October.”
Currently, in the SEC’s decision-making lineup, Valkyrie leads the pack with its Bitcoin & Ether Strategy ETF (BTF), with a ruling expected by October 3. It is set for a decision from the US Securities and Exchange Commission (SEC) by October 9. Thus, the Ether Volatility Equity Strategy ETF (ETHU) is in line with the decision on October 11th.
Rapid developments in the ETF space, particularly surrounding Ethereum, indicate a maturation of the market and a growing institutional interest in the second largest cryptocurrency by market cap. As the race heats up, the cryptocurrency community will be watching closely to see which company successfully launches the first Ethereum futures ETF in the US, which could send a bullish signal to the spot market.
At the time of writing, Ether (ETH) remains in its narrow trading range between $1,822 and $1,882.
Featured image from iStock, chart from TradingView.com