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Ethereum ETF Trading Begins as BlackRock, Fidelity, Others Jockey for Dominance – DL News
- Spot Ethereum ETFs have been launched.
- The launch comes two months after the SEC approved the products on all but the official terms.
- Analysts are divided on whether ETFs will boost the price of Ether in the short term.
Spot Ethereum ETFs are here.
Pre-market trading began in New York this morning.
Volume is “significantly lighter than pre-market trading of Bitcoin ETFs on launch day,” said Matt Hougan, chief investment officer at crypto index fund manager Bitwise, published on X. “However, it is good to see trading activity in the major players expected ahead of the market.”
Nine different ETFs are now available on the market, issued by BlackRock, Fidelity Investments, Grayscale Investments, VanEck, Invesco and Galaxy Digital, 21Shares, Hashdex, Franklin Templeton and Bitwise.
Together, these broadcasters have more than 15 trillion dollars in assets under management, according to Bloomberg Intelligence ETF analyst Eric Balchunas.
And they’re rolling out the red carpet for cryptocurrencies, said Bloomberg ETF analyst Eric Balchunas, citing BlackRock’s webpage to explain Ethereum to its investors.
“This kind of first-class TradFi treatment, that is, translating the benefits into Boomer terms and delivering them into the most preferred investment vehicle on the planet (the ETF) is a major deal,” Balchunas She said.
While the SEC informally approved Ethereum ETFs on May 23, when it finalized a series of crucial documents, called 19b-4s, with potential issuers, the products were only made “effective” on Monday, after the agency reviewed another batch of documents, called S-1s.
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Impact on price
The approval process for spot Bitcoin ETFs has fueled a monster rally for the leading cryptocurrency, but Ethereum hasn’t experienced the same kind of hype.
The price of Ether increased by nearly 20% in one day in May following news that the SEC was going to the green light the products, but failed to breach its annual high of $4,100.
Some market observers expect the launch of Ethereum ETFs to change that. QCP Capital He says the event could trigger a 60% rally for Ethereum.
Others are more skeptical.
The “expectations of cryptocurrency natives are exaggerated and disconnected from the true preferences of TraditionFi allocators”, Andrew Kang, managing partner of investment firm Mechanism Capital, he wrote on X.
Ethereum “has a much lower buy-in as a key portfolio allocation for many large, non-crypto-native capital groups,” Kang said.
Bernstein Analysts took a somewhat middle-of-the-road stance, arguing that the situation might be challenging in the short term, but that ETFs were certainly bullish in the long term.
The argument is that Ethereum ETFs pave the way for Ethereum to become a primary network for the Tokenization of traditional assets — something that the financial powers like Black rock they are particularly interested.
Rollercoaster Trial
The cryptocurrency industry clamored for Ethereum ETFs almost as soon as Bitcoin ETFs were launched.
Instead, he faced months of radio silence from the SEC, leading to speculation that the market watchdog would refuse the products.
The impression was that SEC Chairman and vocal cryptocurrency critic Gary Gensler had grudgingly approved Bitcoin ETFs after losing a court case against Greyscale.
The asset manager had fought regulators to convert its Grayscale Bitcoin Trust into a spot Bitcoin ETF, and after a federal appeals court sided with Grayscale, Gensler was forced to agree.
There was no such case to support an Ethereum ETF.
Furthermore, Gensler’s refusal to clearly specify whether Ether was a commodity or a security made the launch of an Ethereum ETF even more unlikely.
This view was reinforced by the SEC’s launch of an investigation into the Ethereum Foundation and other Ethereum-affiliated organizations, such as Consensys and Uniswap.
But on May 20, just three days before a crucial deadline for approval or denial, the agency suddenly started communicating with potential issuers.
Industry leaders, such as Galaxy Digital CEO Mike Novogratz, have mostly criticized the SEC’s change of heart on the changing political winds in Washington in the wake of former President Donald Trump, traditionally agnostic towards cryptocurrencies, who befriended the sector ahead of the presidential election.
But the SEC’s reversal was so sudden that took his own staff by surpriseanalysts said.
Both 19b-4 and S-1 filings were approved simultaneously for Bitcoin ETFs.
On the other hand, Ethereum ETFs saw their 19b-4s finalized first, and it took the Corporate Finance division, which handles S-1s, nearly two months to catch up.
This is why the products were confirmed in semi-official terms when the 19b-4 documentation was completed in late May, but have not been launched until now.
Tom Carreras is a market correspondent for DL News. Have an Ethereum ETF tip? Contact us at tcarreras@dlnews.com