ETF concept is hot. After Bitcoin, the first Ethereum ETF submits application to SEC

While the SolidX Bitcoin exchange-traded fund (ETF) and the Winklevoss brothers’ Bitcoin ETF are competing fiercely, another ETF competitor has emerged, but this time it is not a Bitcoin ETF, but an Ethereum ETF.

However, Ethereum has been a bit busy recently. The previous soft fork failed, and now a hard fork is being carried out. At the same time, the hard fork does not seem to be going so smoothly, and some people have already pointed out the problems that may exist in the hard fork.

A recently launched company called EtherIndex formally filed an application with the U.S. Securities and Exchange Commission (SEC) on July 15, aiming to provide the public and traditional investors with the opportunity to invest in Ethereum.

Similar to existing public digital asset trading and investment vehicles, such as Grayscale Investments’ Bitcoin Investment Trust and the Winklevoss Bitcoin Trust, EtherIndex’s Ether Trust will provide investors with shares that represent an interest in the trust’s net assets.

“The shares represent indivisible units of income from fractions of the net assets of the Fund,” according to the SEC filing.

However, like the Winklevoss Bitcoin Trust, investors or purchasers of EtherIndex Ether Trust shares are not insured, and the fund does not guarantee against possible loss or theft of Ether. The fund explains that investors must understand the risks involved in purchasing digital currencies like Ether, taking into account possible loss, damage, theft and restricted access.

The EtherIndex team said: “The Fund’s Ether may be subject to loss, theft, or restricted access. Some or all of the Fund’s Ether may be lost, stolen, or destroyed because the private keys held by Custodian, which are associated with the public Ether address holding the Fund’s Ether, may be lost or stolen.”

They added: “The fund will not insure its ether. Custodian will insure the ether in accordance with the terms of its insurance policy, consistent with its custodial obligations, and it shall be responsible for all costs, fees and expenses of the insurance policy.”

According to historical statistics, ETFs have a premium for actual digital currencies. This can be seen from Grayscale Investments' Bitcoin Investment Trust and other existing public ETFs. One of the main reasons why investors are willing to pay a premium for these institutions and companies is that they do not have to consider security or technical issues.

The Ethereum Foundation declined to comment on the report from Forbes, which was the first to report the news.