ProShares Files To List Two Spot Ethereum ETFs, Approval Odd Is High

Only a few days after introducing the first Bitcoin ETF that targets 2x daily Bitcoin (BTC) returns, premier ETF provider and asset manager ProShares is now eyeing a similar spot Ethereum ETF.

ProShares Making a Bold Ether ETF Play

According to senior Bloomberg analyst Eric Balchunas, ProShares has applied to list 2x and -2x spot Ethereum ETFs with the United States Securities and Exchange Commission (SEC). The fling was made as 40 Act because ProShares does not hold Ethereum directly. Instead, it utilizes swap contracts to expose investors to the cryptocurrency.

Additionally, the filing shares many similarities with the 2x spot Bitcoin ETF that ProShares introduced earlier. ProShares UltraShort Bitcoin ETF (SBIT) and ProShares Ultra Bitcoin ETF (BITU) were designed to offer the accessibility, convenience, and efficiency of traditional ETFs to investors seeking leveraged or short BTC exposure. They are a one-of-a-kind ETF but they both have their specific utilization.

This is kinda interesting, ProShares has filed for 2x and -2x Spot Ether ETFs.. and it's filed as 40 Act bc they don't actually hold either but rather use swap contracts for the exposure. This is exact filing as $SBIT and that was allowed to launch 75 days on schedule. pic.twitter.com/xPFZfmaODc

— Eric Balchunas (@EricBalchunas) April 9, 2024

While “BITU offers investors the opportunity to pursue magnified Bitcoin returns or target a level of exposure with less money at risk. SBIT allows investors to seek to profit when the price of Bitcoin drops or hedge their Bitcoin exposure,” per a statement from Michael L. Sapir, ProShares’ CEO.

The ProShares 2x Ether ETF filing comes after Defiance Investment also filed a 2x leveraged Ether Futures ETF that will potentially trade under the ticker ETHL  yesterday. 

This ETF could potentially commence trading as soon as late June. Defiance also launched a 2X Short MicroStrategy (MSTR) ETF, a product that was recently criticized by Adam Back, Blockstream CEO. 

Back labeled the offering as “awful” while questioning its longevity on the premise that shorting MicroStrategy and longing Bitcoin was not a smart play considering the duos correlation.

Spot Ethereum ETF Approval Odds

Markedly, Ether ETF has taken the spotlight in the cryptocurrency ecosystem as enthusiasts anticipate potential approval from the SEC for the offering. There have been speculations about the Commission’s stance on having a spot Ethereum ETF, especially since the SEC is intensifying efforts to categorize the underlying cryptocurrency as a security.

It appears that the odds of having ProShares and Defiance’s filing approved is high but this is not the case for core spot Ethereum ETFs. To highlight this uncertainty, Polymarket gamblers have placed their bets against Ethereum ETF approval on or before May 31. 

At the moment, the odds for approval on the platform is set at 45%. Per the broader market charter, approval odds don’t look too promising for spot Ethereum ETFs.