The Securities and Exchange Commission (SEC) has approved the start of spot Ethereum ETFs on July 23. Eight asset managers will offer these new financial instruments: BlackRock, Ark Invest/21Shares, VanEck, Grayscale, Fidelity, Bitwise, Franklin Templeton, and Invesco/Galaxy Digital.
Spot Ethereum ETFs will follow the current price of Ethereum, offering a new way of investing in crypto-assets. This will enable investors to own shares of Ether held in the trust without necessarily having a crypto wallet. These ETFs are similar to stocks and can be bought and sold during the day’s trading hours.
Ethereum ETF Fees Revealed by Top Issuers
The spot Ethereum ETFs are structured as grantor trusts like the Bitcoin ETFs. They expose investors to Ethereum’s market without having to own Ethereum directly, making it easier for investors who may not be familiar with crypto wallets and exchanges.
Expenses for these ETFs are reasonable. Franklin Templeton will charge 0.19%, VanEck 0.20%, and BlackRock 0.25%. Invesco and Galaxy Digital will launch an ETF with an expense ratio of 0.25%. The final fees will be stated in the registration statements filed with the SEC.
The ETFs will be traded on the leading stock exchanges, including Nasdaq, CBOE, and NYSE. This broad accessibility allows both institutional and retail investors to get involved. The list of issuers is also quite diverse, which means that investors will have several choices.
High Inflows Expected for New Ethereum ETFs
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There are expectations of high inflows into the new Ethereum ETFs. K33 Research predicts $4 billion in the first six months. This could take up 1% of Ether in circulation, increasing its value.
These ETFs could perform as well as Bitcoin ETFs that have gained over $54 billion in assets. However, considering Ether’s market cap, the ETFs are anticipated to perform well based on industry standards. James Seyffart, the ETF analyst at Bloomberg, estimates that demand will be at 20% of spot bitcoin ETFs.
Preliminary investments are expected to come from institutional investors like hedge and pension funds. Individual investors will also invest directly or indirectly through their wealth managers. The trend of Bitcoin ETFs suggests that non-professional investors will likely be the early traders.
Expert Predicts Strong Impact from Ethereum ETFs
ETH ETFs are a significant boost to the crypto market, given that they are officially listed products. In an interview with Fortune, Leah Wald, the CEO of Cyberpunk Holdings Inc., suggested that performance should be measured within the first six months. Volume and spread will be among the most critical determinants of success over the long term.
K33 Research’s Vetle Lunde said that the fresh capital from these ETFs might help bolster the broader crypto market. Such is the level of influence that Bitcoin ETF inflows have already increased the market cap by 46% in 2024. Ethereum ETFs can strengthen the market even more by allowing this stagnant capital to come in.
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Also Read: SEC approves Grayscale & ProShares spot Ethereum ETFs for trading
