Ethereum, VanEck officially submits application to SEC for first spot ETF

Asset management firm VanEck has taken a significant step towards launching the first spot ETF on Ethereum in the US. The company has in fact filed an S-1 registration form with the US Securities and Exchange Commission (SEC). This preliminary document is a prerequisite for the introduction of a new financial product in the US market.

Objectives and features of the VanEck Ethereum ETF

According to the preliminary prospectus, the new VanEck Ethereum ETF will be listed on the Cboe BZX Exchange with the ticker ‘ETHV’. The objective of the fund is to reflect the price performance of Ethereum, minus management fees. The value of the fund’s shares will be calculated daily based on the MarketVector Ethereum Benchmark Rate, an index using prices from the five major Ethereum trading platforms selected by VanEck.

Unique aspects of the fund

A distinctive feature of this ETF is that the fund will actually hold Ethereum, unlike other futures-based products. Importantly, neither the trust nor its associated parties will engage in Ethereum staking or other return-generating activities with the fund’s assets. Initially, the fund will only allow cash creation and redemption by authorised participants.

Market context and competition

VanEck’s initiative comes at a time when the cryptocurrency industry is eagerly awaiting SEC approval of the first spot ETF on Ethereum. This type of ETF could offer more direct exposure to Ethereum’s price movements than the futures-based products currently available on the market. According to Bloomberg analyst Erich Balchunas, this move by VanEck is expected to be quickly followed by similar applications from other issuers, except Bitwise, which already filed its S-1 form a week earlier.

Next steps and perspectives

Despite the enthusiasm, the path to approval remains uncertain. To date, the SEC has not approved any spot cryptocurrency ETFs, citing concerns about market manipulation and investor protection. However, industry analysts, such as Nate Geraci, believe that issuers are already preparing to launch in the coming weeks. The SEC will review VanEck’s application in the coming weeks, a process that will be closely monitored by investors and market participants.

Following VanEck several Spot Ethereum ETF applicants submitted updated S-1 documents to the SEC for approval of their ETF products on Friday. As a final step before the launch, the SEC requested that issuers submit new documents to speed up the ETF product review process:

  • Fidelity
  • Franklin
  • 21Shares
  • Grayscale
  • BlackRock