Three crypto asset managers have proposed new crypto-focused Exchange-Traded Funds (ETFs) for approval. Grayscale Investments announced the formation of a separate entity to oversee its ever-growing funds on May 9. The new trust will also include a number of other initiatives and Grayscale filed a statement of registration with the United States Securities Exchange Commission (SEC).
The new funds include an Ethereum Futures ETF, a Global Bitcoin Composite ETF, and a Privacy ETF. The Global Bitcoin Composite ETFs would invest in products traded on exchanges that are related or backed by Bitcoin (BTC), including Bitcoin companies that mine minerals. The Ethereum Futures ETF allows for indirect exposure to potential future values of Ether (ETH) by way of shares that track ETH’s price. The Grayscale Privacy ETF would be investing in companies that are working on privacy technology based on blockchain.
Until the SEC approves the ETFs, they will not be available to the public. Grayscale and the SEC are still in a conflict over the conversion of the $17 billion Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. On Jan. 13, Grayscale argued that the SEC had acted arbitrarily by treating exchange-traded crypto products as different from futures.
“There is a 99.9% correlation between prices in the Bitcoin futures market and the spot Bitcoin market,” Grayscale stated in its brief against the SEC. The SEC has approved several Bitcoin Futures ETFs, but has so far rejected every application for a spot Bitcoin ETF. Concerns about fraud and possible market manipulation were cited as reasons for the rejection of this investment product.
