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Will these 8 Ethereum ETFs be approved on July 2?
Earlier this month, Bloomberg ETF analyst Eric Balchunas tweeted that, based on his reports, he believed the agency would approve Ethereum ETFs for trading on July 2. Several of Balchunas’ predictions on this subject have already come true.
Balchunas correctly predicted the approval of Bitcoin ETFs in January, as well as several events leading up to the approval of an ETH ETF, lending credibility to his tweets [0].
What is an Ethereum spot ETF?
Ethereum has many features that distinguish it from Bitcoin. blockchain not only hosts Ether coins; it is also the home of decentralized applications And non-fungible tokens that run on the Ethereum protocol. Ethereum now also uses a proof of participation system for creating new parts — a more energy-efficient system than the proof of work process behind Bitcoin Mining(Ethereum also used a proof-of-work system until it switched to proof-of-stake in 2022.)
There are already Ethereum strategy ETFs on the market, which indirectly track the price of Ether using in the long term contracts. However, these may not track the price of the cryptocurrency as accurately as a spot Ethereum ETF would, and they may charge higher fees. If the spot Ethereum ETFs are approved on July 2, they would be the first of their kind.
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How many Ethereum ETFs could be approved?
To date, eight different ETF issuers have filed registration statements with the SEC for Ethereum ETFs.
They are listed below, along with the expected name and ticker symbol of each ETF, each ETF’s fees, and any promotional fee waivers, if that information is available. (Some issuers file registration statements with blank spaces where the ETF’s fees should be stated.)
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Franklin Ethereum Trust (EZET) |
Fees waived for the first six months of trading or the first $10 billion of fund assets, whichever comes first. |
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VanEck Ethereum Trust (ETHV) |
Fees waived for the fund’s first $1.5 billion of assets. |
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Grayscale Ethereum Mini Trust (ETH) |
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Fidelity Ethereum Fund (FETH) |
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21Shares Core Ethereum ETF (CETH) |
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Bitwise Ethereum ETF (ETHW) |
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Invesco Galaxy Ethereum Exchange Traded Fund (QETH) |
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iShares Ethereum Trust (ETHA) |
Source: SEC EDGAR system. Data is current as of June 24, 2024 and is provided for informational purposes only.
In the days leading up to the first Bitcoin ETF approvals in January 2024, Bitcoin ETF issuers were in a race to the bottom in terms of fees. Many issuers filed multiple amended registration statements reducing their fees to try to get ahead of their competitors, some of whom responded hours later by filing their own amended registration statements with even lower fees.
Others have announced last-minute promotions, such as reducing their fees to zero for the first six months of trading, in an effort to distinguish themselves as the cheapest Bitcoin ETF. This rapid exchange of fee cuts and promotions continued in the hours before the SEC approval was announced.
Investors could see a similar price war between potential Ethereum ETF issuers in the coming days. With that in mind, it’s worth checking out any information you find online about Ethereum ETF fees and promotions. Any numbers you see online could be outdated by the time you read them.
Ethereum ETF Strategy
We define an Ethereum Strategy ETF as any ETF that invests at least 50% of its assets in Ethereum futures contracts. There are seven such funds on the market today, and they are listed below from lowest to highest fee amounts.
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VanEck Ethereum Strategy ETF (EFUT) |
I invested in Ether futures. |
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21Shares ARK Ethereum Futures Strategy Active ETF (ARKZ) |
Invested in Ether futures. |
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Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP) |
Invested in Bitcoin and Ether futures contracts. Fees reduced to 0.85% until October 2, 2025. |
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Bitwise Ethereum Strategy ETF (AETH) |
Invested in Ether futures. Fees reduced to 0.85% until October 2, 2025. |
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Valkyrie Bitcoin and Ether Strategy ETF (BTF) |
I invested in Bitcoin and Ether futures. |
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ProShares Ether Strategy ETF (EETH) |
Invest in Ether futures. Fee reduced to 0.95% until October 31, 2024. |
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ProShares Bitcoin and Ether Equal Weight Strategy ETF (BETE) |
Invested in Bitcoin and Ether futures contracts. Fee reduced to 0.95% until October 31, 2024. |
Sources: Fund websites. Data is current as of June 25, 2024 and for information purposes only.
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What Would ETF Approvals Mean for Ethereum?
Ethereum’s price is up about 44% this year as of this writing. Would ETF approvals add to that momentum? That remains to be seen.
Ethereum ETFs would offer 401(k) and IRA investors a new way to invest in crypto. Americans collectively hold nearly $40 trillion in retirement accounts, and many of these retirement accounts do not allow cryptocurrency trading themselves.
In the three months since Bitcoin ETFs were approved, the price of Bitcoin has actually increased – by more than 50%, in fact. But it’s hard to say whether this is entirely due to ETF-related purchases.
There is another potential explanation for Bitcoin’s early 2024 rally: the hype that led to the Bitcoin Halving in April. And whatever the main cause of this rally, it didn’t last long. Bitcoin is down more than 10% over the past three months.
Ethereum ETF vs Ethereum itself
Spot Ethereum ETFs could have some advantages over other ways to invest in Ethereum. As we discussed, they could offer investors who cannot purchase Ethereum directly (such as investors in retirement accounts) a cheaper and more reliable way to invest in Ethereum than the existing range of Ethereum Strategy ETF.
However, it is important to note that Ethereum ETFs have some disadvantages compared to owning the cryptocurrency itself. Ethereum ETF Investors Would Not Receive staking rewards (a kind of interest payment or dividend for Ether holders).
If you want to benefit from this feature of Ethereum, you will need to invest in the cryptocurrency itself.