New Ethereum ETFs Set to Launch: Everything You Need to Know
New Ethereum ETFs Set to Hit the Market: What Investors Need to Know
Investors looking to get in on the action of the second most popular cryptocurrency, Ethereum, will soon have a new option available to them. Spot ETFs for Ethereum are set to begin trading on Tuesday, July 23, after receiving the green light from the Securities and Exchange Commission. At least three funds are expected to enter the market on that day, with a total of eight Ethereum ETFs launching simultaneously.
Following in the footsteps of the successful Bitcoin ETFs, which have amassed over $54 billion in assets under management since January, the Ethereum ETFs are poised to make a splash in the market. Here’s what you need to know about these new investment opportunities.
What is a spot Ether ETF?
Ether is the native cryptocurrency of the Ethereum blockchain, and while the SEC considers it a commodity, the corresponding ETFs will be classified as securities. These ETFs will track the spot price of Ether, giving investors access to the cryptocurrency without the need for a crypto wallet. The ETFs will be set up as grantor trusts, allowing investors to own a share of the Ether held by the trust.
Who issues them and what are the fees?
Eight asset managers, including BlackRock, Ark Invest/21Shares, VanEck, and Grayscale, are proposing to offer Ethereum ETFs. The fees charged to investors are competitive, with Franklin Templeton, VanEck, and Invesco/Galaxy Digital revealing fees of 0.19%, 0.20%, and 0.25% respectively. The full list of fees will be disclosed when the final registration statements are submitted to the SEC on Tuesday.
Where can I access them?
The Ethereum ETFs will be listed on the Nasdaq, Chicago Board Options Exchange (CBOE), and New York Stock Exchange, providing investors with multiple options for trading.
Why would someone buy an Ethereum ETF?
While Bitcoin and Ether both represent ownership of underlying blockchains, they serve different purposes. Ethereum is more focused on enabling financial services without intermediaries, tokenization, digital collectibles, and digital identity. Investing in Ether ETFs allows investors to diversify their crypto holdings and tap into different sectors of the crypto economy.
Will their popularity match the spot Bitcoin ETFs?
Experts predict that demand for the Ethereum ETFs will be 20% that of the Bitcoin ETFs due to the smaller market capitalization of Ether. However, the ETFs are still expected to be successful, with inflows estimated to reach $4 billion in the first six months of trading.
Who will be investing in them?
Institutional investors, such as hedge funds and pension funds, as well as retail investors, are expected to invest in the Ethereum ETFs. Retail investors may dominate the initial trading period, similar to the trend seen with Bitcoin ETFs.
How will the ETFs impact the crypto market?
Inflows of $4 billion into the Ethereum ETFs over six months could absorb 1% of Ether in circulation, potentially strengthening the cryptocurrency’s price. The influx of capital is also expected to have a positive impact on the wider crypto market, attracting new investors and boosting market strength.
Overall, the launch of Ethereum ETFs represents a significant step in the mainstream adoption of cryptocurrencies, with BlackRock’s involvement signaling a growing acceptance of digital assets in traditional finance. Investors looking to diversify their portfolios and tap into the potential of Ethereum now have a new avenue to explore with the upcoming launch of these ETFs.
