Valkyrie Unveils Double-Barreled Approach To Launch An Ethereum ETF Alongside A Bitcoin ETF

Valkyrie has applied to the US Securities and Exchange Commission (SEC) to add ETH futures contracts to its Valkyrie Bitcoin Strategy ETF (BTF). 

Valkyrie’s application represents a move to stay ahead of the crowd. While many have applied to launch their respective Ethereum (ETH) Exchange-Traded Funds (ETFs), Valkyrie has simply moved to include exposure to ETH futures contracts in their existing investment strategy. 

While the likelihood of the SEC’s approving these Ethereum ETFs or in what order remains uncertain, Valkyrie plans to introduce its double-barreled approach on or around October 3, putting its launch date ahead of that of other competitors. 

Part of the filing reads:

In addition, on or about October 3, 2023, the Fund’s name is expected to change to Valkyrie Bitcoin and Ether Strategy ETF. The Fund is expected to continue to trade on The Nasdaq Stock Market LLC under the ticker symbol “BTF”. The foregoing changes will only take effect and are conditioned upon the effectiveness of the Trust’s Post-Effective Amendment No. 23 under the Securities Act of 1933, including any amendments thereto, which has been filed with the Securities and Exchange Commission on August 4, 2023 and contains further information about the changes to the Fund’s name and investment strategy.

Going by SEC Rule 485(a), those who applied for the Ether ETFs can launch 75 days from their respective filing dates if none of the applications before the SEC gets denied. In tandem with the 75 days, the earliest any of these fund managers (the first being Volatility Shares, who applied on July 28) can launch is October 12 (9 days after Valkyrie’s proposed launch if their application gets greenlit by the SEC).

This first-mover advantage can be critical when looking back at history. Although Valkyrie launched its Bitcoin fund in October 2021, it wasn’t the first to do so, as ProShares had already launched its Bitcoin Strategy ETF (BITO). 

Many believe that BITO launching first is one of the reasons it has enjoyed more success compared to Valkyrie’s Bitcoin Strategy ETF (BTF). BITO now has over $1 billion in assets under management (AuM) compared to BTF’s AuM of about $30 million.

As Bloomberg Senior ETF Analyst Eric Balchunas noted in a tweet, this isn’t the first time someone is moving to amend an existing fund to launch the first such product in the industry. 

ETF Managers Group has previously moved to convert a Latin American real estate ETF to the ETFMG Alternative Harvest ETF (MJ), so it could be first in line to launch marijuana ETFs in the US – something which has been compared to what Valkyrie is trying to do.