The U.S. Securities and Exchange Commission (SEC) has received a filing from YieldMax, a well-known ETF issuer, introducing an Ether Option Income Strategy ETF. According to a June 21, 2024 filing, the ETF will be listed on the New York Stock Exchange (NYSE) Arca. Furthermore, this calculated action is being taken before the possible U.S. debut of Spot Ethereum ETFs.
The Ether Option Income Strategy ETF from YieldMax
The YieldMax ETF that is being suggested will use a synthetic covered call approach. Its goal is to make money for investors by taking advantage of the volatility of the underlying Spot Ethereum ETFs. Additionally, holders of Spot Ethereum ETFs can effectively control their risk exposure and generate additional money by selling call options.
It’s crucial to remember that the fund will not take direct Ethereum investments or any future Spot Ethereum ETFs. Tidal Investments will actively manage the Ether Option ETF, with sub-advisory services being provided by ZEGA Financial. To put things in perspective, ZEGA Financial is a U.S. Securities and Exchange Commission-registered investment advisor focusing on trading derivatives.
Additionally, this new registration comes after YieldMax’s Bitcoin Option Yield Strategy ETF (YBIT) was introduced last year. The YBIT ETF has an expense ratio of 0.99% and is also listed on NYSE Arca. Spot Ethereum ETFs are the subject of much current activity.
All eight applicants reportedly filed S-1 modifications with the SEC lately, based on the most recent filings. These changes also include additional information on fees and seed investments. Prominent firms like BlackRock, 21Shares, Fidelity, Grayscale, Franklin Templeton, VanEck, Bitwise, and Invesco are among the applicants.
Candidates File Amended S-1 Submissions for Ethereum ETF Spots
BlackRock, VanEck, Invesco Galaxy, Franklin Templeton, Grayscale, and 21Shares filed a fresh batch of updated S-1 filings with the SEC on Friday. Bitwise and Fidelity had already turned in their modifications. So far, only VanEck and Franklin Templeton have revealed their fees, which are 0.20% and 0.19%, respectively.
Additionally, senior ETF analyst at Bloomberg Eric Balchunas offered his thoughts on the competitive cost structure. “VanEck’s fee of 0.20% is quite low, putting pressure on BlackRock to keep their fee under 30bps,” he wrote in a post on X.
The 19b-4 forms for these ETFs were already approved by the SEC last month. However, before trading can start, the registration statements must be completed. A few companies have also revealed the initial investment made in these ETFs. This demonstrates their dedication to the money and provision of the starting amount required for trading.
The 21Shares Core Ethereum Trust ETF sponsor, 21Shares US LLC, has purchased 20,000 shares to make a $340,739 seed investment. Furthermore, the Ethereum ETFs offered by Franklin Templeton and Invesco Ltd. each have revealed $100,000 in initial capital investments. In the meantime, BlackRock revealed a sizeable $10 million seed payment, indicating a solid commitment.
With a rumoured July 2 start date, the market anxiously awaits the SEC’s ultimate verdict. Before ETFs can start trading, the SEC’s stringent review process guarantees that all disclosure and regulatory requirements have been fully fulfilled. As a result, the S-1 amendments propose ongoing communication between the applicants and the SEC.
