SEC gives spot Ethereum ETFs green light

The U.S. Securities and Exchange Commission (SEC) has granted approval for several spot Ethereum ETFs, which are expected to begin trading on Tuesday. This landmark decision marks a key moment in the digital asset space, opening the way for broader institutional and retail investor participation in Ethereum.

SEC approved spot Ethereum ETFs

As of Monday evening, the following spot Ethereum ETFs had effective prospectuses, meaning the SEC had cleared them for trading:

21Shares Core Ethereum ETF (CETH)

The 21Shares Core Ethereum ETP is a physically backed product that tracks the value of Ethereum (ETH). Launched in September 2022, it aims to provide cost-efficient exposure to Ethereum with a total expense ratio (TER) of 0.21%. This product is listed on the SIX Swiss Exchange and is designed to offer low management fees by lending out a portion of its underlying assets and holding segregated collateral in cold storage​.

Bitwise Ethereum ETF (ETHW)

The Bitwise Ethereum ETF aims to provide investors with straightforward exposure to Ethereum by tracking its market price. Bitwise, known for its extensive experience in crypto asset management, launched this fund following SEC approval. The fund is set to trade on the NYSE and has committed to donating 10% of its profits to support Ethereum’s open-source development​.

Fidelity Ethereum Fund (FETH)

Managed by Fidelity Investments, this fund offers direct exposure to Ethereum. Listed on the DTCC under the ticker FETH, it aims to provide a secure and reliable way to invest in Ethereum, leveraging Fidelity’s extensive financial expertise.

Franklin Ethereum Trust (EZET)

Managed by Franklin Templeton, this ETF aims to provide secure and efficient exposure to Ethereum’s market performance. It is listed on the Depository Trust and Clearing Corporation (DTCC) under the ticker EZET. This listing marks a significant step towards making the ETF available for trading.

Invesco Galaxy Ethereum ETF (QETH)

This ETF is a collaborative effort between Invesco and Galaxy Digital, designed to provide institutional-grade exposure to Ethereum. The partnership leverages the financial and crypto expertise of both firms to offer a robust investment vehicle for those interested in Ethereum. Detailed information about this specific ETF can be found through Invesco and Galaxy Digital’s official announcements and filings.

iShares Ethereum Trust ETF (ETHA)

Managed by iShares, a division of BlackRock, this ETF seeks to track the performance of Ethereum, offering a regulated and trusted investment vehicle for Ethereum. More information about this ETF is available through BlackRock’s official releases and financial documentation.

VanEck Ethereum ETF (ETHV)

VanEck’s Ethereum ETF provides secure and regulated exposure to Ethereum. Known for its innovative investment solutions, VanEck continues to bridge traditional finance and digital assets with this ETF. Official VanEck releases and financial statements provide more detailed information about this ETF.

These approvals signify that the regulatory body has thoroughly reviewed and authorized these funds for public trading, underscoring a growing acceptance of cryptocurrency-based financial products within mainstream financial markets.

Notably, the updated prospectuses for Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Mini Trust (ETH) were still pending at the time of this announcement. This delay indicates that while several ETFs have cleared regulatory hurdles, some products are still under review, reflecting the SEC’s cautious approach to ensuring investor protection and market stability.

The introduction of these spot Ether ETFs is expected to provide a more accessible and regulated means for investors to gain exposure to Ethereum.

SEC has granted approval for several spot Ethereum ETFs (Image credit) Ethereum ETF launch date

Following the final nod from the U.S. SEC, numerous spot Ethereum ETFs are anticipated to start trading on Tuesday, July 23, 2024. This approval is a big step for Ethereum-based financial products, following closely in the footsteps of the Bitcoin ETFs that launched approximately six months ago, which achieved unprecedented success in the market.

While the spot Ethereum ETFs are not expected to match the popularity of their Bitcoin counterparts—primarily due to Ethereum’s total market size being roughly one-fourth that of Bitcoin—they are still projected to make a considerable impact. The launch of Bitcoin ETFs was heralded as one of the most successful in the industry’s history, setting a high benchmark for subsequent cryptocurrency-based ETFs.

Despite these tempered expectations, the Ether ETFs are anticipated to be substantial in size relative to most ETF launches. This optimistic outlook is based on the increasing institutional interest in cryptocurrency and the expanding adoption of Ethereum in various applications, including decentralized finance (DeFi) and non-fungible tokens (NFTs).

The entry of these spot Ethereum ETFs into the market signifies a growing recognition and acceptance of Ether as a viable investment asset. It also reflects the maturation of the cryptocurrency market, as more sophisticated financial products become available to investors.

What is a Bitcoin ETF?

Current Ethereum price

Following the SEC’s approval of several spot Ethereum ETFs, the market has shown a noticeable response. As of the latest TradingView data, the price of Ethereum (ETH) stands at $3,453.4, reflecting a 0.33% increase over the past day. This positive movement is a promising sign for investors, indicating a potential uptick in market confidence and interest in Ethereum.

However, the one-week performance shows a slight decline of 0.91%, suggesting some volatility and caution among traders. Over the past month, ETH has experienced a modest decrease of 1.16%, which may be attributed to broader market trends and regulatory uncertainties.

Despite these short-term fluctuations, Ethereum’s longer-term performance remains robust. Over the past six months, ETH has surged by 54.56%, and its year-to-date growth stands at an impressive 51.33%. Looking at the year-on-year performance, Ethereum has appreciated by a remarkable 82.83%, highlighting its strong recovery and growth trajectory.

Over a five-year period, ETH has seen a steady increase of 1.50%, and since its inception, the cryptocurrency has recorded an extraordinary all-time growth of 121.86%.

Following the SEC’s approval of several spot Ethereum ETFs, the market has shown a noticeable response (Image credit)

Featured image credit: Kerem Gülen/Midjourney