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The company submitted an S-1 form for a fund titled the Bitwise Ethereum ETF. Like other similar applications, the fund aims to provide exposure to the value of ETH held in its trust.
The submission includes several vital details, notably that Bitwise aims to list on the NYSE Arca exchange and plans to use Coinbase Custody as a custodian. However, it did not disclose information on the ticker and fees.
Bitwise’s application discusses Ethereum staking as a broad aspect of Ethereum itself. However, the application does not discuss the possibility that the fund will stake ETH and earn returns, unlike competing applications from Ark 21Shares and Fidelity.
Strong futures/spot correlation
NYSE Arca also submitted a related 19b-4 filing on March 28, proposing a rule change to allow it to list Bitwise’s spot Ethereum ETF.
Bitwise contributed an analysis to the filing, which found a “strong correlation” between the ETH spot market and the CME ETH futures market.
The analysis aims to establish the same argument as spot Bitcoin ETFs to meet certain SEC requirements related to monitoring potential market manipulation.
Establishing a correlation between the Bitcoin futures and spot markets was crucial in securing the approval of the first spot Bitcoin ETFs in January.
Odds of approval are low.
Despite Bitwise’s latest submission, expectations around pending spot Ethereum ETFs are poor.
Bloomberg analyst Eric Balchunas said on March 11 that spot Ethereum ETFs have 35% odds of approval by May 23, primarily based on a lack of signs from the SEC that led up to earlier spot Bitcoin ETF approvals. Polymarket has a 20% chance of getting an ETH ETF approval by the end of May.
The SEC must approve or reject a spot Ethereum ETF application from VanEck by May 23. However, the SEC will likely decide on all similar applications simultaneously.
At least seven asset managers apart from Bitwise have applications pending.