Kryptoin has submitted a proposal to the Securities and Exchange Commission in the United States of America to establish a physically-backed Ethereum exchange-traded fund (ETF).
Kryptoin, a digital asset investment firm, has submitted an application with the Securities and Exchange Commission (SEC) for an Ethereum exchange-traded fund (ETF). The Kryptoin Ethereum ETF Trust, if approved, would be traded on the Cboe BZX platform.
Kryptoin modified its previous Bitcoin ETF application in April after it was rejected by the Securities and Exchange Commission in 2019. The updated filing specifies Gemini as the custodian of the product and Cboe BZX as the proposed exchange.
Exchange-traded funds, or ETFs, are financial vehicles that enable investors to trade a basket of securities in the same way they would purchase or sell stocks. An Ethereum ETF, on the other hand, would be linked to the price of ETH, allowing investors to have exposure to the asset without incurring custodial costs. The issuer receives a percentage of transaction fees. Numerous firms, including VanEck, Fidelity, and Anthony Scaramucci’s SkyBridge Capital, have petitioned the SEC to enable ETFs tied to the price of Bitcoin or Ether, but the agency has thus far refrained.
For the time being in the United States, the closest thing to an ETF is an investment trust, such as Grayscale’s GBTC Trust. However, these are markedly different in some critical aspects. Notably, Grayscale is a closed-end fund; there are a limited number of shares available and investors must hold them for months, resulting in significant price differentials between the crypto asset and the crypto ETF share.
Grayscale has been selling at a 10% discount, making it cheaper to purchase than genuine Bitcoin. ETFs would trade significantly closer to the asset’s price. Canada approved the country’s first Bitcoin and Ethereum exchange-traded funds (ETFs) earlier this year. Pro-crypto banking institutions are hopeful that the United States would follow suit.
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