VanEck launches its Ethereum Strategy ETF (EFUT)

VanEck has launched its Ethereum Strategy ETF (EFUT), the new fund that offers targeted exposure to ETH futures contracts, traded on exchanges registered with the Commodity Futures Trading Commission (CFTC). 

VanEck: the new Ethereum Strategy ETF (EFUT) is based on ETH futures contracts

Investment management firm, VanEck, yesterday launched its new ETF based on Ethereum futures contracts, called the Ethereum Strategy ETF (EFUT). Here is the pre-announcement from a few days ago on X: 

Basically, the new EFUT offers investors targeted exposure to ETH futures contracts and not directly to Ethereum (ETH). These futures contracts are standardized and cash-settled on ETH, traded on exchanges registered with the Commodity Futures Trading Commission (CFTC).

Not only that, currently, the only ETH futures in which the Fund intends to invest are those traded on the Chicago Mercantile Exchange.

VanEck’s new signature Ethereum futures ETF is now listed on its website, with the ticker EFUT, and will be traded on the Chicago Board Options Exchange (CBOE). 

VanEck: new Ethereum Strategy ETF (EFUT) after Bitcoin futures ETF

Kyle DaCruz, product director for digital assets at VanEck, commented on the launch of the new Ethereum Strategy ETF as follows:

“Ethereum is the layer 1 building block of the decentralized applications ecosystem, driving innovations in digital currencies, global payments, smart contracts and much more, with Ethereum as the platform’s method of exchange. While investors still do not have the means to gain exposure to digital assets here in the U.S. via a spot ETF product, we’re very pleased to be launching EFUT as a means to access the robust futures market that has developed around ETH itself.”

What is unique about the VanEck Ethereum Strategy ETF (CBOE: EFUT) is that it is structured as a C-Corp, potentially providing a more tax-efficient experience for long-term investors. 

EFUT joins the existing VanEck Bitcoin Strategy ETF (XBTF), which offers futures exposure to Bitcoin. Like EFUT, XBTF is also structured as a C-Corp. XBTF does not invest directly in BTC or other digital assets.

Approval by the US SEC

Last August 2023, the U.S. Securities and Exchange Commission, or SEC, had received almost simultaneously four applications for Ethereum futures ETFs that it had to consider whether to approve. 

Specifically, the SEC was holding applications from VanEck, ProShares, Bitwise, and Roundhill, companies well known for these kinds of financial derivatives. The four applications came in the wake of Volatility Shares’ application, which had been accepted without much trouble by the SEC. 

And indeed, just the following month, the regulatory agency decided to approve the application of VanEck, which wasted no time and proceeded to launch its first ETF on ETH futures. 

It is likely that this decision was facilitated by the fact that the SEC has long since approved ETFs based on Bitcoin price futures contracts, exactly since 2017. In contrast, in early September Cathie Wood’s ARK Investsubmitted an official request to the SEC to issue a spot Ethereum ETF. In this case, the situation is somewhat different, as the government agency has not yet approved the spot ETF on Bitcoin.