Ethereum
Volatility Shares 2X Ether ETF Launches, Hope for Ethereum Price
Investment manager Volatility Shares has launched its 2x Ether ETF (ETHU) following the publication of its prospectus on Tuesday. The product, according to the unveiled prospectus, the new Ethereum product “seeks investment results, before fees and expenses, that are twice (2x) the daily performance of Ether.”
Precursor to the Spot Ethereum ETF
Volatility Shares ETHU is the first product to launch since the US Securities and Exchange Commission (SEC) approved 8 Ethereum spot ETF products last month. As an ETH bridge product, the Volatility Shares ETHU will provide a new way for investors to gain exposure to the underlying assets.
In the prospectus, the company stated that the fund would not invest directly in Ethereum.
“The Fund does not invest directly in ether. Instead, the Fund seeks to benefit from increases in the price of ether futures with the goal of producing 2x the performance of ether.
Additionally, the Volatility Shares 2x Ether ETF may also invest in reverse repo transactions. It was also noted that it was planned to inject funds into shares of other companies investing in a similar product. As a safety measure in line with its investment strategy, the fund will invest a total of 80% of its capital in the product.
Volatile stocks are not new in crypto-related float products for the US market. As Coingape previously reported, the company launched a Ethereum Futures ETF in the third quarter of 2023. It is one of several Ethereum-related products that has been seen as a major takeoff for the one-time approval of the Ethereum ETF.
Will futures ETFs disappear?
With the approval of the Ethereum spot ETF, there is a significant threat to previous Ether-related ETF products. This trend was observed in the case of ProShares Futures ETF which lost significant inflow during the launch of spot Bitcoin ETF products earlier in January.
It is still unclear how much market share Ethereum spot ETF products will take when S-1 approvals are granted by the US SEC. Still, products like Volatility Shares might need to compete, especially since the company has set its referral fee at 0.94%. It is worth noting that potential issuers of spot Ethereum ETFs have more competitive fees like Franklin Templetonit’s 0.19%.
These products are poised to have a positive impact on the price of Ethereum in the long term. Currently, the coin is changing hands for $3,810.92, up 0.87% in 24 hours.
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