On Monday, VanEck introduced the VanEck Ethereum Strategy ETF, marking one of the initial instances of a U.S. investment firm offering a futures-based exchange-traded fund (ETF) linked to the world's second-largest cryptocurrency, Ethereum (ETH).
The newly unveiled ETF will primarily invest in Ethereum futures contracts, with a particular focus on those traded exclusively on the Chicago Mercantile Exchange, as stated by the fund manager.
Todd Rosenbluth, the Head of Research at VettaFi, commented on the development, noting that historically, being the first mover in the ETF market has offered advantages, especially when the funds' exposure aligns with existing offerings.
EFUT is well-prepared to attract investments from individuals seeking exposure to this segment of the cryptocurrency market.
ProShares, Bitwise, and Invesco have likewise submitted applications to list several ETFs linked to Ethereum, and these are anticipated to debut later in the day, according to reports from traders and the media.
With an expense ratio of 0.66%, this fund will be organized as a C-Corporation, necessitating tax payments at the fund level. Any distributions to investors will also be subject to taxation on their end.
Reuters (2023) ‘VanEck launches ETF tied to ether futures’, 2 October. Available at: https://www.reuters.com/technology/vaneck-launches-etf-tied-ether-futures-2023-10-02/ (Accessed: 2 October 2023).