Markets
Ethereum Spot ETFs Debut on US Markets as Trading Begins
Key points
- The first spot Ethereum ETFs begin trading in the US today.
- Ethereum ETFs are expected to attract up to $1 billion in initial monthly inflows.
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Today marks a watershed moment in US financial markets: the first spot Ethereum ETFs begin trading.
Approved by the US SECThese funds allow investors to interact directly with the world’s second largest cryptocurrency.
Jay Jacobs, head of thematic and active ETFs at BlackRock in the US, highlighted The Utility of Ethereumstating: “You could think of Ethereum as a global platform for applications that run without decentralized intermediaries.”
The SEC allowed the S1 registration statements to become effective Monday afternoon, giving final approval for the funds to begin trading. This development comes less than three months after the launch of spot Bitcoin ETFs in January.
Eight issuers offer spot Ethereum ETFs with different fee structures:
- Grayscale Ethereum Mini Trust (NYSE: ETH): 0.15% post-waiver fee
- Franklin Ethereum ETF (CBOE: EZET): 0.19%
- VanEck Ethereum ETF (CBOE: ETHV): 0.20%
- Bitwise Ethereum ETF (NYSE: ETHW): 0.20%
- 21Shares Core Ethereum ETF (CBOE: CETH): 0.21%
- Fidelity Ethereum Fund (CBOE: FETH): 0.25%
- iShare Ethereum Trust (NASDAQ: ETHA): 0.25%
- Invesco Galaxy Ethereum ETF (CBOE:QETH): 0.25%
Additionally, Grayscale’s Ethereum Trust (NYSE: ETHE) will continue to trade at a 2.5% fee. Six of the funds will use Coinbase as custodian, while VanEck has chosen Gemini and Fidelity will self-custody its ether.
Analysts expect more modest inflows for Ethereum ETFs than for their Bitcoin counterparts. Citigroup estimates between $4.7 billion and $5.4 billion in inflows in the first six months of trading. Nate Geraci, president of The ETF Store, suggests that demand for Ethereum ETFs could be about a third of what was seen with Bitcoin ETFs.
The ETFs are available to both institutional investors and retail traders. Notably, six of these funds have chosen Coinbase as their custodian, while others have opted for other custodial solutions. Trading platforms and their fees vary, with Grayscale Ethereum Mini Trust and Invesco Galaxy Ethereum ETF among those listed.
Comparatively, Ethereum ETFs are expected to see lower initial inflows than their Bitcoin counterparts, with projections suggesting up to $1 billion in monthly net inflows for the first half of the year. Despite their smaller market size compared to Bitcoin, the introduction of these ETFs is poised to provide a new avenue for cryptocurrency investing.
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