Investment Firms Compete for Ethereum Futures ETF: How Will ETH be Affected?

• A recent report showed that some financial institutions have started applying for Ethereum ETFs. With the recognition of ETH as an asset class in traditional finance, the price trend may be affected.
• On August 1st, Volatility Shares, Bitwise, Roundhill, VanEck, Proshares, and Grayscale submitted their applications for these ETFs. Later, Direxion also joined these companies.
• The advantage of Ethereum ETF is that investors do not need to worry about private keys, storage, or security related to holding cryptocurrencies.

Investment firms are awaiting approval for Ethereum Futures ETFs; Investment giant Direxion also joins the waiting list!

Investment Firms Applying for ETH ETFs

A recent report showed that some financial institutions have started applying for Ethereum ETFs. With the recognition of ETH as an asset class in traditional finance, the price trend may be affected. According to Eric Balchunas, a senior ETF analyst at Bloomberg, six companies are applying for Ethereum futures ETFs.

On August 1st, Volatility Shares, Bitwise, Roundhill, VanEck, Proshares, and Grayscale submitted their applications for these ETFs. Later, Direxion also joined these companies by applying for Futures ETFs for Bitcoin and Ethereum.

An Ethereum ETF is an exchange-traded fund that includes ETH or assets tied to its price. Unlike cryptocurrencies traded on dedicated cryptocurrency exchanges, an ETH ETF is traded on a traditional exchange. The operation of an ETH ETF is similar to other ETFs. Investors can purchase shares of the ETF through brokerage firms and trade these shares in the same way as stocks.

The advantage of Ethereum ETF is that investors do not need to worry about private keys, storage, or security related to holding cryptocurrencies. Instead, they own the ETF and are exposed to the cryptocurrency market without the complexity of purchasing and holding actual crypto assets.

Correlation between Ethereum and S&P500

A correlation graph of Crypto-S&P 500 showed that Ethereum exhibited a strong correlation with stocks from early June to the end of July. During this period, the price trends moved simultaneously. However, the correlation weakened over time, and since then, the price trend of ETH has diverged from S&P500 and other stocks.

As of the time of writing this article, S&P500 and other stocks have experienced significant increases, rising over 10%. In contrast, the ETH price decreased but remained relatively stable, showing a decrease of less than 1%.

At the time of writing this article, Ethereum experienced a decline on a daily timeframe and dropped to around $1,836, a decrease of approximately 0.8% from previous levels. The Moving Average Convergence Divergence (MACD) indicator indicated a bear market at the time of writing. Additionally, the Relative Strength Index (RSI) line was approaching 40, indicating a significant bearish trend for Ethereum.