Valkyrie, an asset management firm, has submitted an application to the United States Securities and Exchange Commission for an exchange-traded fund (ETF) that will track the future prices of Ether.
Ether is the cryptocurrency that powers the Ethereum blockchain, a decentralized platform for peer-to-peer transactions.
The application, filed on Aug. 16, is an extension of Valkyrie’s previous attempt to modify its investment strategy for a Bitcoin futures ETF in accordance with the regulator.
The proposed ETF will not invest directly in Ether, but will buy a number of ETH futures contracts instead. Futures contracts are standardized deals to trade an asset at a predetermined price and date in the future.
The ETF will limit its investment in Ether futures to 8,000 contracts per month, following the position limits set by the Chicago Mercantile Exchange. The rest of the ETF’s assets will be invested in cash, cash equivalents or high-quality securities, such as U.S. government bonds, money market funds and corporate debt securities.
The ETF aims to provide investors with an opportunity to speculate on the future value of Ether through a regulated and transparent vehicle. If approved, the ETF will be one of the first of its kind in the U.S. market.