The Securities and Exchange Commission (SEC) has provided final approval to spot Ethereum exchange-traded funds (ETFs), which will follow the listing and trading of these instruments on three American exchanges on July 23.
The final stamp on the S-1 registration forms of the spot Ethereum ETF issuers came two months after the regulator approved the listing of the crypto instruments on the Nasdaq, New York Stock Exchange, and Chicago Board Options Exchange.
The approved issuers of the spot Ether ETF include BlackRock, Fidelity, 21Shares, Bitwise, Franklin Templeton, VanEck, and Invesco Galaxy. Interestingly, all of them also offer spot Bitcoin ETFs, which the SEC greenlighted at the beginning of this year.
“Our clients are increasingly interested in gaining exposure to digital assets through exchange-traded products (ETPs) which provide convenient access, liquidity, and transparency,” said Jay Jacobs, BlackRock’s US Head of Thematic and Active ETFs, after the approval of its spot Ether ETF. “Ethereum’s appeal lies in its decentralised nature and its potential to drive digital transformation in finance and other industries.”
Historical moment, Ethereum ETFs will be tradeable tomorrow🔥👇 pic.twitter.com/j01SuM97N6
— Ted (@TedPillows) July 22, 2024
Will Spot Ether ETFs Replicate Bitcoin ETFs’ Success?
Ethereum is the second-largest cryptocurrency in terms of market capitalisation, only after Bitcoin. However, while Bitcoin leads the market with a market capitalisation of over $1.32 trillion, Ethereum only has $415.8 billion. This suggests that the demand for Ethereum ETFs might be much lower than that for its Bitcoin counterpart because of its sheer size.
To attract investors, all spot Ether ETFs, except Grayscale, kept the base fee between 0.15 percent and 0.25 percent. Fidelity, 21Shares, Bitwise, Franklin, and VanEck will also waive all fees until a set period or a determined amount in net assets is achieved.
Ethereum ETF Fees are public now. Let’s see how this plays out.
Grayscale mini .25%
Grayscale Ether at hopping 2.5%Don’t you think you will move to reduced fees if you were on Greyscale? https://t.co/D6stM6mNgK pic.twitter.com/o5a6MChPUM
— 0̷xShivaraj (@0xShivaraj) July 18, 2024
The SEC’s approval, however, failed to make any significant impact on the prices of Ethereum on crypto exchanges. In the last 24 hours, the cryptocurrency lost 1.6 percent of its value and is trading at around $4,560, as of press time, compared to the $4,700 peak it achieved in November 2021.
Meanwhile, many companies are now attempting to get approval for Solana-based ETFs, to bring more cryptocurrencies to the mainstream market.
