Valkyrie files with SEC for new Ethereum Strategy ETF

Quick Take

Dubbed the Valkyrie Ethereum Strategy ETF, the fund will seek to provide investors with capital appreciation by investing in exchange-traded futures contracts on ether and other “collateral investments.”

Valkyrie Funds, which already offers a Bitcoin Strategy ETF and a Bitcoin Miners ETF, filed with the Securities and Exchange Commission on Wednesday for a new fund that would invest specifically in ether futures.

Dubbed the Valkyrie Ethereum Strategy ETF, the fund will seek to provide investors with capital appreciation by investing in exchange-traded futures contracts on ether and “collateral investments” including high-quality securities such as Treasury bonds and commercial paper. The fund will not directly invest in ether.

"Ether and ether futures are a relatively new asset class," Valkyrie said in the filing. "They are subject to unique and substantial risks, and historically, have been subject to significant price volatility. The value of an investment in the Fund could decline significantly and without warning, including to zero. You should be prepared to lose your entire investment."

The race for a spot bitcoin ETF

The latest filing comes amid a wave of applications for spot bitcoin funds. While the SEC has yet to approve one that invests directly in the cryptocurrency, it has approved funds that invest in bitcoin futures. Critics have questioned the regulator's previous willingness to approve funds that invest in crypto futures while not yet allowing the spot funds.

Valkyrie in June joined the race for a spot bitcoin ETF. Called the Valkyrie Bitcoin Fund, the fund would hold bitcoin to reflect the performance of the CME CF Bitcoin Reference Rate, New York Variant.

The digital asset manager has also previously filed to add ether futures to its existing bitcoin futures fund.