Galaxy Digital, led by Mike Novogratz, and asset management giant Invesco have thrown their hats into the Ethereum (ETH) spot exchange-traded fund (ETF) race, despite looming concerns of a government shutdown and delays at the Securities and Exchange Commission (SEC).
Building on their previous joint application for a Bitcoin (BTC) ETF in June, the Invesco Galaxy Ethereum ETF has been formally proposed. According to the S-1 registration statement, this ETF will mirror the performance of Ethereum’s spot price by holding cryptocurrency units in custody with an as-yet-unidentified custodian. While Invesco is the sponsor, Galaxy Digital will serve as the “execution agent,” responsible for selling ETH to cover the Trust’s expenses.
This move marks the fourth application for an Ethereum spot ETF submitted to the SEC in recent weeks, following similar filings by Ark Invest/21Shares, VanEck, and Hashdex earlier in the month. Industry insiders have long considered a spot ETF as the next logical step for crypto investment in the U.S., especially with the impending launch of an Ethereum futures product.
VanEck and Valkyrie secured approvals this week, with Bloomberg ETF analyst James Seyffart hinting at the possibility of Bitwise, ProShares, Hashdex, and Volatility Shares joining them in launching as early as Monday, October 2.
Valkyrie initially announced the start of trading for its Ethereum ETF on Friday but faced issues with the SEC for prematurely purchasing Ether futures contracts. As a result, the firm has committed to unwinding its existing ETH futures position and will only repurchase contracts after the fund’s official launch next week.
While futures-based ETFs have found favor with regulators, spot crypto ETFs remain elusive for U.S. investors. The application for Invesco and Galaxy’s Bitcoin spot ETF, along with those from BlackRock, Bitwise, and Valkyrie, has faced two SEC delays since June.
The SEC now faces growing pressure following its loss in a lawsuit against Grayscale, where a federal court deemed the agency’s repeated rejection of Grayscale’s spot ETF product as “arbitrary and capricious,” especially considering the SEC’s openness to futures-based ETFs. Bitwise has even filed an amendment to its Bitcoin ETF application, accounting for future SEC rejections against similar products despite its court victory.
