ProShares, Bitwise file with SEC for Bitcoin and Ether ETFs

abdelaziz Fathi

ProShares and Bitwise have jointly filed applications with the U.S. Securities and Exchange Commission (SEC) for exchange-traded funds (ETFs) that aim to provide exposure to both bitcoin (BTC) and ether (ETH).

ProShares’ filing outlines the objective of its ETF, named the Bitcoin and Ether Equal Weight Strategy ETF, which seeks to achieve investment results that track the performance of the Bitcoin and Ether Equal Weight Index before fees and expenses.

According to the filing, the proposed fund “seeks investment results, before fees and expenses, that track the performance of the Bitcoin and Ether Equal Weight Index and will measure the performance of holding long positions in the nearest maturing monthly bitcoin and ether futures contracts.”

ProShares already has several cryptocurrency-related funds, including a bitcoin futures ETF. Additionally, the company previously applied for an ETF focused on the metaverse sector at the end of last year. The provider of investment products was behind the first US inverse Bitcoin exchange-traded fund (ETF) which made its debut in June on the New York Stock Exchange. Trading under the ticker “BITI,” the vehicle gives investors a way to profit from declines in the price of Bitcoin.

Earlier in April, ProShares applied with the United States Securities and Exchange Commission for an investment vehicle that would allow users to essentially bet against bitcoin using an exchange-traded fund. The move came barely six months after the company introduced the first bitcoin futures ETF trading in the US. The latter was the first Bitcoin futures ETF to get listed on a US exchange and accumulated more than $1.5 billion in assets in less than a month of trading.

Following the US regulators’ reluctance to approve a spot bitcoin ETF, many applicants have turned their focus to products offering exposure to the crypto futures market, bitcoin miners, or companies hold crypto on their balance sheets.

SEC Chair Gary Gensler said that he would be open to approving a bitcoin-futures ETF, but only under certain conditions. The revelation rankled some fund managers who were hopeful of a physically backed ETF, but regulated like a normal exchange-traded fund under a 1933 law.

There are a number of applications underway to get a spot bitcoin ETF listed, but so far none have been approved by the SEC. The agency only extended the deliberation window or opened the matter to public comments to avoid reaching any decision on a proposal.

ETFs that invest in futures contracts must continually roll forward the fund’s exposure as the contracts expire. Since issuers have to pay fees to do so along the way, the process eats into returns, causing the ETF’s performance to become unmoored from the underlying asset it tracks.

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