Aug 17, 2023

Valkyrie Digital Assets has filed an application for an ethereum-focused ETF with the U.S. Securities and Exchange Commission (SEC).

Video transcript

Val digital assets has filed an application for an Ethereum focused ETF with the SEC roughly a month after filing one for Spot Bitcoin, uh Spot Bitcoin ETF. So what does this all mean? This is exciting, isn't it? Who knows? Maybe they'll buy some of Donald Trump's uh e to, to put in there. We don't know. Uh joining us now to discuss is Coin Desk, global policy regulation. Managing editor Nick Day, who's also the editor of Coin de State of crypto newsletter. The thing that every mother loves getting on Mother's Day. Good morning, Nick. Good morning. So Val thinks that, hey, if it's good enough to file for Bitcoin, it's good enough to file for E they're going all in. Why are they doing this right now? Yeah. So Val is just the latest company to jump on a trend of, you know, several other companies have filed for Ether futures ETF S and they all seem to think that, you know, first off, there's a real chance that the SEC will not stand in the way of this ETF application and B that it could launch as soon as this year. Um You know, we've seen another, uh, a number of companies I said, uh file for Ethereum strategies, ETF so investing in e futures products rather than spot ether or, you know, whatever. Um, and, uh without getting too into the, like, you know, the nitty gritty of this, they're all filing under a specific law that would allow them to uh launch sooner rather than later. Should the SCC not object. Traditionally in the past, when companies have tried this, we've seen the SEC object fairly quickly and, you know, tell companies, ok, you know, we're not gonna allow us withdraw your file, that hasn't happened so far yet. So, you know, hopes are high. This, the, it hinges though on the SEC saying that, uh, I assume it, it hinges on the SEC saying that e is not a security, right? That, that they, that they uphold what the Hinman uh doctrine, what are we calling it? Um, that is not a security. Yeah. Um, I mean, that's absolutely one of the considerations, um, a whether or not, uh, or, well, how the SCC is looking at ease. But one factor that, you know, I think everyone's keeping in mind here is that you already have Ether futures products themselves. So, uh, it's not like, you know, the SEC can say, oh, well, yeah, you don't even have an Ether futures product. Yes, CFCC has OK to Ether futures a while ago. Um, I think that's part of, you know, what everyone's looking at right now, uh, how the SEC is going to classify either moving forward. I think it is. We've gotten hints and suggestions that, you know, SEC chair, Gary Gusler and others at the agency might say that it is now a security post, you know, transition or post merged to the proof of stake, uh, you know, process, but we haven't seen anything, you know, come out, uh, too official, I guess is how I would phrase it, right. Um There's no uh lawsuits alleging that it is a security, uh like they have with other cryptocurrencies, we haven't seen any rulemaking or guidance. So things are a little up in the air right now. So between, between the Ethereum and Bitcoin focused ETF S, which one is more likely to be approved by the SEC, I feel like we talk about ETF S on this show every day now, we have Ethereum. Uh either future ef we have spot Bitcoin ETF, we have ETF S over in Amsterdam that have nothing to do with this. So what is the EC um more likely going to approve here? So just right now, um the Ether futures ETF seem to have a slightly greater chance of happening, timeline wise sooner, for sure. Um Yeah, you know, the thing to watch out for here is, uh you know, whether or not the SEC objects and ask these, uh you know, the sponsors of these applications to withdraw them. We haven't seen that yet, we might still see it, you know, in the next two months or so. But, uh, you know, every day that passes where it doesn't happen, there is a greater chance that the ETF will indeed be approved. Uh, as far as the spot, Bitcoin ETF S, you know, that process is ongoing. Um, those I imagine we're not going to get any kind of, you know, quick response to, uh, unless the SEC decides. Ok, well, you know what, you're just gonna let all of these have no ones, but I, I think that's still, you know, we have time to go before we get to that particular, uh, project or part of that process. I believe the SCC is due to make some decisions in September. Do you on the spot? Bitcoin ETF S. Do you think those are gonna get the delayed or is that what is generally, um, being said? Yeah, I mean, every time in the past when the SEC has come to a deadline where it has the option to delay a decision, it's delayed this, uh, the decision, right? It's, um, every time they've, uh, said, you know, we want to extend a rule making period or we want to put out a common period or whatever. So, II, I think everyone's expecting that when these deadlines hit next month, the SCC is gonna say, ok, you know, we want to spend more time considering this, they might, um, have to check where they are in the process. They may or may not be at the, you know, whole public comment stage, but if not, certainly that'll be next. All right, Nick, thank you for joining us this morning. That was Coindesk global policy and regulation managing editor Nick Day and don't forget to sign up for the state of crypto newsletter on Coindesk dot com.

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