ProShares ETF ProShares ETF
ProShares has multiple Ethereum Futures ETFs but didn't file to issue a spot ETH ETF until this month. ProShares Website/Screenshot

KEY POINTS

  • NYSE Arca told the SEC in its proposal that ProShares' ETH ETF will "enhance competition"
  • The SEC has been unpredictable in its handling of spot Ethereum ETF filings
  • Gensler has said the approval of spot ETH ETF S-1 filings will depend on how responsive issuers are

The race toward issuing spot Ether (ETH) exchange-traded funds (ETFs) is not over as the U.S. Securities and Exchange Commission (SEC) confirmed it is considering asset manager ProShares' application to issue its own ETH ETF.

The SEC's acknowledgement does not mean ProShares' ETH ETF is already in the running to launch once the earlier applicants' S-1 filings are approved, senior Bloomberg ETF analyst James Seyffart reiterated. On the other hand, he did say that such a late filing is quite "intriguing."

The regulator said NYSE Arca proposed to list and trade ProShares' Ether ETF, saying that it believes the listing "would enhance competition among market participants, to the benefit of investors and the marketplace."

The SEC now wants the public to provide their insights on the filing. Comments can be submitted 21 days after publication in the Federal Register.

Seyffart said based on "instinct," ProShares' ETH ETF will not launch on the same day the SEC approves the S-1 filings of the other companies that filed to issue their own Ethereum ETFs. However, the SEC has been unpredictable in its handling of ETH ETF applications, as it demonstrated in the shock approval of earlier applicants' 19b-4 filings.

ProShares' Ethereum Futures ETFs were among nine funds that the SEC approved in October, signaling a shifting tone from the regulator that has been largely hostile toward the cryptocurrency sector.

Following the approval of spot Ether ETFs, the digital assets space has been anticipating the approval of S-1 filings so the funds can start trading. However, SEC Chair Gary Gensler suggested that the timeline for approval is a burden the issuers should bear, and not on the regulatory agency's side. "It's really up to them how responsive they are," he said last week.

His comments may be contradictory to earlier reports that the Wall Street regulator had been unresponsive during meetings with applying issuers in the lead-up to the sudden provision of comments for proposals.

Companies that filed to issue the funds were reportedly pessimistic about the funds' approval in late April following discouraging outcomes in meetings with SEC staff as the regulator supposedly did not provide comments on their issues regarding the proposed funds.

Things only took a sudden turn late last month when VanEck, an applicant, confirmed that comments were coming in from the SEC. The regulator later approved 19b-4 filings after staking was removed from the filings.

Some industry experts expect a potential S-1 approval for earlier applicants sometime at the end of June or early July.