Introduction
Today, on July 23, Ethereum spot ETFs were launched in the United States, marking a significant milestone for the world's second-largest cryptocurrency. This event provides professional investors and advisors with a new channel to invest in Ethereum, further integrating digital assets into traditional finance.
The newly introduced Ethereum ETFs stem from both conventional fund managers like BlackRock and Fidelity, and crypto-focused firms such as Grayscale.
SEC Approval
On Monday, the U.S. Securities and Exchange Commission (SEC) greenlit the S1 registration statements, enabling these funds to enter the trading sphere. Eight issuers have unveiled their Ethereum ETFs for institutional investors and individual traders.
Issuers and Tickers
- Grayscale Ethereum Mini Trust (NYSE: ETH)
- Grayscale Ethereum Trust (NYSE: ETHE)
- Franklin Ethereum ETF (CBOE: EZET)
- VanEck Ethereum ETF (CBOE: ETHV)
- Bitwise Ethereum ETF (NYSE: ETHW)
- 21Shares Core Ethereum ETF (CBOE: CETH)
- Fidelity Ethereum Fund (CBOE: FETH)
- iShares Ethereum Trust (NASDAQ: ETHA)
- Invesco Galaxy Ethereum ETF (CBOE: QETH)
Six of these funds will rely on Coinbase for custody services. VanEck has partnered with Gemini, while Fidelity has chosen self-custody for its Ether holdings.
Market Response and Forecasts
The introduction of these ETFs follows the SEC's approval of 19b-4 proposals from the three exchanges designated to list the products. Analysts anticipate that Ethereum ETFs will attract a fraction of the investments compared to Bitcoin ETFs initially.
Ryan Lee, principal analyst at Bitget Research, projects that spot Ether ETFs will swiftly capture around 2.5% of Ethereum's market capitalization, equivalent to approximately $10.6 billion. Bloomberg analysts Eric Balchunas and James Seyffart estimate these funds to amass between $5 billion and $6 billion in the first year. Galaxy Digital predicts an influx of $5 billion within five months.
Contrasting views suggest a slower uptake. Steven McClurg, head of U.S. asset management at CoinShares, forecasts that spot Ether ETFs will draw merely 10% of the investments seen by Bitcoin funds. Danny Chong, co-founder of Tranchess, highlights the potential impact of even modest inflows on the Ethereum market due to its lower market cap relative to Bitcoin.
Ahead of the market opening, Bitwise chief investment officer Matt Hougan noted lower pre-market trading activity for Ethereum ETFs compared to Bitcoin ETFs on their launch day.
Current Market Status
Ethereum (ETH) has maintained a stable trading pattern in the last 24 hours, valued at $3456 at the time of publication.
