Crypto News: Valkyrie U-Turns on ETH-Futures ETF Despite SEC Approval

Bob Mason
Updated: Sep 30, 2023, 22:33 GMT+00:00

Amidst surging filings, the SEC's approval of Valkyrie's trailblazing Ether futures ETF signals a new era, even as spot ETF decisions loom, enticing keen investors.

Crypto News

In this article:

Key Insights:

  • Invesco and Galaxy joined the surge in filings for crypto-spot ETFs with the SEC.
  • SEC’s green light to Valkyrie escalates ETH’s prominence in US ETFs.
  • ETH futures stir as Valkyrie unwinds positions, spotlighting market volatility.

SEC Approves Valkyrie Futures ETF but Kicks Spot ETF Can Down the Road

Valkyrie planned to reportedly launch the Valkyrie Bitcoin and Ether Strategy ETF (BTF.O) on Monday, October 3. On Thursday, Valkyrie Funds LLC announced the addition of ethereum futures to its Bitcoin futures ETF after receiving SEC approval.

However, Valkyrie reversed course on Friday, announcing the unwinding of existing ETH futures positions. Within the filing to the SEC, Valkyrie stated,

“the Fund will not purchase ether futures contract until the effectiveness of an amendment to the Fund’s registration statement contemplating the addition of ether futures contracts to the principal investment strategy of the Fund. Until such time, the Fund will unwind any existing positions in ether futures contracts.”

Despite the decision to reverse course, other ETH-futures ETFs will launch on Monday. Valkyrie Chief Investment Officer Steven McClurg said, “The SEC has told VanEck and ProShares they can also launch on Monday.”

The SEC approvals put ETH on the US ETF map. While investors don’t hold physical assets in the futures markets, the evolution of the crypto futures market to include ETH futures ETFs is a positive step forward.

SEC Flooded with Crypto-Spot ETF Applications

Filings to the SEC for crypto-spot ETFs surge as the US Government tumbles toward a shutdown.

On Friday, Invesco and Galaxy joined a growing list of firms applying for ETH-spot ETFs. According to the Form S-1 Registration Statement to the SEC, Invesco and Galaxy requested approval to launch the Invesco Galaxy Ethereum ETF. The ETF investment objective “is to reflect the performance of the spot price of ether […]” less expenses and other liabilities.

Earlier this month, the Nasdaq and Hashdex filed for the Hashdex Nasdaq Ethereum ETF. In contrast to the Galaxy/Invesco strategy, the Hashdex Nasdaq Ethereum ETF proposes exposure to futures and spot. The ETH filing followed the filing for a hybrid BTC ETF in August.

Technical Analysis

Bitcoin Analysis

BTC remained below the 50-day and 200-day EMAs, sending bearish price signals. A BTC break above the 50-day and 200-day EMAs may signal a near-term reversal bearish trend reversal.

A US government shutdown will likely delay progress in the SEC cases against Binance, Coinbase, and Ripple. It would also further delay the launch of crypto-spot ETFs. However, a government shutdown would curb regulation by enforcement activity across the digital asset space.

With the markets expecting the SEC to delay crypto-spot ETF reviews, the SEC’s inability to target the crypto market could offer price support.

Failure to break above the 50-day and 200-day EMAs would support a BTC fall through the $26,755 support level to test buyer appetite at $26,500.

The 14-Daily RSI reading of 54.68 supports a BTC move through the EMAs and a return to $27,000 before entering overbought territory.

BTC Daily Chart sends bearish price signals.
BTCUSD 300923 Daily Chart

Ethereum Analysis

ETH sat above the 50-day EMA while remaining below the 200-day EMA, sending bullish near-term but bearish longer-term price signals. An ETH return to $1,700 would support a break above the 200-day EMA and the $1,746 resistance level.

The focal point will remain the submission and the approvals of ETH futures and spot ETFs.

A break below the 50-day EMA would support an ETH fall below $1,600.

The 14-Daily RSI reading of 58.50 suggests that ETH could return to $1,700 before it enters overbought territory.

ETH Daily Chart sent bullish near-term price signals.
ETHUSD 300923 Daily Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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