Valkyrie, the asset management firm, has decided to postpone its purchase of ether (ETH) futures contracts until the U.S. Securities and Exchange Commission (SEC) officially confirms the approval of including these futures in its Bitcoin Strategy ETF (BTF). This decision was outlined in an SEC Form 497 filing, where Valkyrie also indicated its intention to unwind any ether futures purchases that may have already been initiated.
This swift reversal follows Valkyrie's announcement the day before, where the company had claimed to be incorporating exposure to ether futures into its Bitcoin Strategy ETF following SEC clearance.
Eric Balchunas, an ETF analyst at Bloomberg, took to Twitter to comment on Valkyrie's change of course, suggesting that the unwinding of ether futures purchases is a reflection of the SEC's reluctance to be perceived as a "kingmaker" by its policies and a determination to prevent entities from launching products independently, reminiscent of the launch of the ProShares Bitcoin Strategy ETF (BITO) in 2021.
Despite Valkyrie's actions, it appears that several ether futures-based ETFs are set to commence trading in the United States starting the following Monday. ProShares, Bitwise, and VanEck are among the notable firms that have confirmed this development in filings submitted to the SEC on the same Friday morning.
As of the time of reporting, Valkyrie had not responded to CoinDesk's request for further comment regarding its decision and the implications for its ETF strategy.
This episode highlights the regulatory intricacies and uncertainties surrounding cryptocurrency-related financial products in the United States, where ETF providers must navigate a complex approval process involving the SEC. The cryptocurrency industry continues to evolve rapidly, and ETF issuers are keen to offer investment products that align with market demand, but they must do so while adhering to regulatory guidelines and the evolving stance of the SEC.