An ethereum futures ETF will be available before one that holds bitcoin directly - and approval could come in the 1st quarter of 2022, Bloomberg analysts say

Ether. NurPhoto
A bitcoin futures-based ETF approval means that a similar offering for Ethereum is likely.

Bloomberg analysts predict that the first ETF ether futures-based could be launched in the first quarter 2022.

A spot bitcoin ETF is possible but it is less likely due to the ongoing opposition by the SEC.

According to Bloomberg analysts, an ether futures-based ETF could launch as soon as the first quarter 2022. This would surpass the expected launch of a bitcoin spot ETF, which directly holds the cryptocurrency.

The SEC approved last month the launch of a bitcoin-based ETF. It uses monthly futures contracts to expose investors to bitcoin's price movements.

The SEC received applications for Ether futures-based ETFs earlier in the summer. However, ProShares and VanEck both withdrew their application on August 20, indicating that the SEC isn't yet ready to approve them.

According to Bloomberg, however, approval could be granted next year. According to the CME data, Ether futures have an open interest of $1.2 billion at present. Analysts pointed out that this is about the same bitcoin futures value as when Gary Gensler, Chairman of the SEC, outlined requirements for futures based ETFs in August.

A futures-based approach is more expensive and less reliable than holding a cryptocurrency directly. This is similar to ETFs that hold gold and silver. The ProShares Bitcoin Strategy ETF launched the fastest ETF to reach more than $1Billion in assets.

Despite the fact that investor demand is strong in a bull market in crypto, the SEC won't be taking the next steps with bitcoin anytime soon.

Bloomberg noted that while a spot Bitcoin ETF may be possible in 2022 it could take longer to get approval from the SEC due to regulatory concerns in the underlying Bitcoin market.

A recent application for a leveraged Bitcoin Futures ETF is unlikely to be approved by the SEC. This indicates that the agency continues to take a hard line on cryptocurrency regulation in its efforts to protect investors.