Asset management firm Valkyrie has taken a significant step by filing for an Ether or Ethereum (ETH) futures exchange-traded fund (ETF) called “Valkyrie Ethereum Strategy ETF” with the United States Securities and Exchange Commission (SEC).
Valkyrie Ether Futures ETF Include Secure Collateral Investments
According to the filed documents on August 16, the proposed ETF will not directly invest in Ether, the native token of the Ethereum blockchain. Instead, it aims to acquire a portfolio of Ether futures contracts.
These contracts are traded on commodity exchanges registered with the Commodity Futures Trading Commission (CFTC), primarily focusing on contracts traded on the Chicago Mercantile Exchange (CME).
The value of these futures contracts will be determined by the CME CF Ether Reference Rate, which tracks the price of Ether across selected cash exchanges.
Per the filing, the Fund intends to employ a “rolling” strategy to manage the expiration of futures contracts. As contracts approach their expiration date, they will be replaced by similar contracts with later expiration dates.
These contracts allow investors to speculate on Ether’s future price movements without owning the digital asset directly.
Apart from Ether futures contracts, the Fund will invest its remaining assets in cash, cash-like instruments, or high-quality securities, collectively called “Collateral Investments.”
These may include U.S. Government securities, money market funds, and corporate debt securities rated investment grade or comparable quality. Collateral Investments serve the purpose of providing liquidity and satisfying margin requirements for the Fund’s futures portfolio.
In addition, the Fund may engage in reverse repurchase agreements to help maintain the desired level of exposure to Ether futures contracts.
These factors are expected to position the proposed Ether ETF favorably with the SEC, as it aligns with their requirements. Therefore, there is optimism for a promising decision in support of the Ether ETF application.
Options Market Supports BTC And ETH Amid Strong US Economy
The strength of the US economy has propelled the US Dollar Index (DXY) to deliver a sharp performance, exerting continued pressure on the cryptocurrency market. However, despite liquidity challenges, the gradual decline in Bitcoin (BTC) and ETH prices has not exceeded expectations.
Fortunately, the options market continues providing…
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