Bitcoin ETFs Can Work – but This Ethereum ETF Won’t

With two proposed Bitcoin ETFs already in the pipeline, would-be cryptocurrency investors were surprised last week by a new filing for an exchange-traded fund based on Ethereum.
An entity called the “EtherIndex Ether Trust” filed an S-1 July 15 with the U. S. Securities and Exchange Commission (SEC). It follows a similar S-1 filing by the Winklevoss Bitcoin Trust (BATS: COIN) three years ago (revised for the sixth time just three weeks ago) as well as an initial S-1 filing for the SolidX Bitcoin Trust (NYSE Arca: XBTC) one week ago.
Like Bitcoin, Ethereum is a digital currency based on blockchain technology. Launched just one year ago, Ethereum has zoomed to a total value of about $1 billion. That’s second only to Bitcoin’s $10.5 billion among the world’s hundreds of cryptocurrencies. [Read More: New Cryptocurrency Ethereum Won’t Kill Bitcoin – and Was Never Meant To] But it looks like the EtherIndex folks have jumped the gun in filing for an Ethereum ETF…
Why This Ethereum ETF Pales Beside the Bitcoin ETFs
It’s not clear this group really knows what it’s doing. The evidence suggests they saw the Bitcoin ETF news and then rushed to slap together an Ethereum S-1 filing.

This post was published at Money Morning on July 20, 2016.