ProShares, a prominent issuer of exchange-traded funds (ETFs), has submitted a proposal to list and trade spot Ethereum (ETH) ETF shares on the New York Stock Exchange (NYSE).

According to the filing with the US Securities Exchange Commission (SEC), the ProShares Ethereum ETF will use Coinbase Custody Trust Company for the custody of ETH. The asset manager noted that the company and its associated parties will not engage in any activities related to Ethereum staking.

Potential issuers of spot Ethereum ETFs have revised their 19b-4 and S-1 filings to exclude staking components. These revisions are intended to address the SEC’s views on staking for spot Ethereum ETFs. However, the approval of these ETFs without staking options may discourage investors looking for additional returns from staking rewards.

Typically, individuals who buy, hold, and stake ETH can earn staking rewards, resulting in additional returns. By excluding the staking feature, spot Ethereum ETFs will not provide these additional benefits to investors.

The SEC has 45 days, extendable up to 90 days, from the date of publication of the notice to respond to the filing. Since ProShares’ spot ETH ETF filed on June 6, 2024, approval can be expected by the end of July 2024. This proposal follows ProShares’ recent introduction of two Ethereum-related ETFs: ProShares Ultra Ether ETF (ETHT) and ProShares UltraShort Ether ETF (ETHD), which target 2x and -2x daily ETH returns, respectively.

ProShares is known for launching the first Bitcoin-related ETF in 2021, the Bitcoin Strategy ETF (BITO), which invests in futures contracts. However, ProShares has not attempted a spot Bitcoin (BTC) ETF, unlike some major asset managers such as Blackrock, Grayscale and Fidelity.

It is important to note that the spot Ethereum ETFs require approval for both submissions in order to officially trade on the market. The approval in May was exclusively for the 19b-4. Analysts expect final approval for these ETFs to occur in July 2024.

These products are expected to provide investors with new levels of flexibility and strategy, allowing for more precise navigation through the volatile crypto market. Meanwhile, the Bitcoin ETF has attracted $2.4 billion after 15 straight days of inflows, as reported by Senior Bloomberg ETF analyst Eric Balchunas in a recent X-post.


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