If the blockbuster success of the first Bitcoin futures fund is any indication, the exit of an Ethereum-based fund could be just as triumphant. And according to Trey Griggs, the US CEO of crypto trading firm GSR, altcoin bulls may not have to wait any longer…
Everything could be ready by the end of the year, according to Trey Griggs
Trey Griggs told Insider in a recent interview:
With the launch of the Bitcoin futures ETF, the heavyweights were lifted.
Griggs said that the critical milestone was the listing of Ethereum futures on the Chicago Mercantile Exchange in February 2021, significantly strengthening Ethereum’s credibility as an asset class, just as it did for Bitcoin when it was listed in December 2017.
A listing on a derivatives exchange, paid in cash and quoted at a CME reference rate that collects data from a variety of crypto exchanges, allows investors to take risks through futures contracts rather than owning cryptocurrencies directly. Futures are contracts to buy and sell a cryptocurrency at a predetermined price and time.
“Saying ‘yes’ to a large number of Ethereum-based ETF implementations is a small boost,” Griggs told Insider. According to the CEO of GSR, Bitcoin could then pass ETH approval faster than the SEC. Griggs states:
I don’t believe it would take the same long time for the SEC to approve an ETF for an identical product with a slightly different basis.
There are about five known applications for Ethereum-based ETFs in the US
Meanwhile, Bitcoin futures ETFs are moving fast after nearly a decade of effort in the $6.7 trillion ETF industry to approve a crypto-based fund.
The ProShares Bitcoin Strategy ETF debuted on Tuesday and is the first US-listed Bitcoin futures ETF and the second most traded fund launch of all time. The Valkyrie Bitcoin Strategy ETF kicks off Friday, and another one from Van Eck will be held next week.
Expectations for other altcoin ETFs
As for potential altcoin futures ETFs, Griggs said they might be possible, but not in the near term. He said the question is whether these coins will be initially listed on the CME.
But in theory some cryptocurrencies like Solana, Cardano and Polkadot have the same Blockchain technology as Ethereum, so Griggs says the idea is not far off:
I would try to think that if the CME, under CFTC guidance, this Ethereum is a commodity, and thus as a commodity, could have futures contracts traded, then similarly, it would be comfortable with some of the other tiers. Tier 1 protocols will be listed as futures contracts.
Still, the futures market has its own quirks. First, it is less liquid and less bulky. And options traders can quickly find themselves in trouble if large demand breaches the limit on the number of futures contracts allowed to be entered into by the CME.
But once an altcoin ETF gives the green light, the underlying cryptocurrency can be expected to move as well. The price of Bitcoin has soared to an all-time high following the launch of ProShares, which could be an indication of how Ethereum price will behave as well. The world’s largest altcoin project has gained 460% and 911% to date in the last 12 months. It is currently trading at $4,040.