Following the unexpected approval of spot Ethereum exchange-traded funds (ETFs) in May, we can now expect the long-awaited products to start trading next week, sources told Decrypt.
An ETF is a popular investment vehicle that allows investors to buy shares that track the price of an underlying asset. This could be anything from gold and foreign currencies to crypto and tech stocks. Such funds trade on stock exchanges.
The U.S. Securities and Exchange Commission (SEC) shocked traditional and crypto markets when it finally said yes to 11 spot Bitcoin exchange-traded funds in January. The approval—which came after a decade of denials—led to a flood of capital into the Bitcoin space.
Industry experts had expected the SEC to be slower in approving the Ethereum equivalents following the regulator’s reticence, but it quietly and quickly approved the funds. Now, the final paperwork is being filed, and if everything goes smoothly, investors will be able to get exposure to the second-biggest digital asset by market cap in a matter of days.
Here are the fund managers waiting to drop their crypto funds.
BlackRock
BlackRock, the world’s biggest asset manager, got the green light for its iShares Ethereum Trust. It first filed an S-1 form for the product back in November.
https://www.youtube.com/watch?v=se1bcqMYg8g
The firm’s CEO, Larry Fink, is seemingly enthusiastic about the cryptocurrency and its network, and has said that there is “value in having an Ethereum ETF.” He has also talked about “tokenization” being inevitable.
Grayscale
Crypto asset manager Grayscale got a yes from the SEC after filing a proposal in October to convert its Grayscale Ethereum Trust into a spot Ethereum ETF.
The current trust right now operates like a closed-end fund. But when it trades as an ETF, investors will be able to easily redeem shares. Its Bitcoin Trust converted into an ETF in January, so there’s already precedent for how such a crypto vehicle can transition over to a spot ETF.
And this week, its proposed mini ETH ETF also got the green light. The mini trust would be seeded with assets currently backing the main, bigger ETF and would have lower fees for investors than its original proposed product.
Grayscale is a big part of the reason why Bitcoin ETFs are trading in the U.S. right now. In a landmark moment for the crypto industry last year, a judge sided with the firm in a lawsuit, agreeing with the firm that Wall Street’s biggest regulator lacked a coherent explanation for denying its proposed conversion to a Bitcoin ETF after years of denials.
The ruling paved the way for the SEC to give the green light to spot Bitcoin ETFs.
Ark Invest/21Shares
Cathie Wood’s heavyweight tech investment management firm, ARK Invest, filed a proposal with the SEC for an Ethereum ETF back in September.
The ETF is in partnership with crypto ETF issuer 21Shares and names Coinbase, America’s biggest digital asset exchange, as its custodian—meaning that the recognized company would hold and store the ETH in the product.
ProShares
The ProShares Ether Strategy ETF was one of the last products to get the stamp of approval from the regulator—just this week with Grayscale’s mini product.
The investment firm had initially applied only for futures products but quietly applied for a spot fund—though details are so far scant.
Fidelity
Financial services giant Fidelity made it clear that it wanted to drop an Ethereum ETF back in November when Cboe—the exchange where the product would trade—filed a 19b-4 on behalf of the firm.
Then, in March, the massive firm filed its S-1 with the SEC for its Fidelity Ethereum Fund.
VanEck
Asset manager VanEck was the first fund manager to file a proposal for an Ethereum ETF with the SEC back in 2021. It later that year withdrew its proposal and has since filed again.
The firm’s Bitcoin ETF has been a successful product, and VanEck even waived its fees to better compete with the other funds on the market.
Hashdex
The Nasdaq in September filed a proposal on behalf of Brazilian fund manager Hashdex for its Hashdex Nasdaq Ethereum ETF.
Hashdex has several crypto ETFs already trading in Brazil. In the U.S., its Hashdex Bitcoin ETF was given the green light by the SEC in January, and began trading in March.
Franklin Templeton
Wall Street giant Franklin Templeton entered the race in February when it filed a proposal with the SEC. The firm’s Franklin Bitcoin ETF launched earlier this year and trades under the EZBC ticker.
Invesco/Galaxy Digital
Asset management giant Invesco submitted a proposal with Mike Novogratz’s Galaxy Digital for an ETH ETF back in September. The S-1 form mentions that Invesco would be the sponsor for the product, while Galaxy Digital would work as its “execution agent”—selling ETH to pay the Invesco Galaxy Ethereum ETF’s expenses.
Bitwise
Digital asset investment firm Bitwise filed its S-1 form with the SEC to offer a spot Ethereum ETF back in March.
Matt Hougan, Chief Investment Officer at Bitwise, previously said that he expects ETH ETFs to launch in December—and predicted they would be more successful if approved later in the year anyway.
Edited by Andrew Hayward
Editor’s note: This story was originally published on May 11, 2024 and last updated with new details on July 19.
