SEC Gives Consent for Spot Ether ETFs to Begin Trading Today

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The United States Securities and Exchange Commission (SEC) approved spot Ether ETFs for trading on July 22. Trading of the ETFs will start on July 23 across stock exchanges including the Nasdaq, the New York Stock Exchange (NYSE), and the Chicago Board Options Exchange.

The Significance of the Approval

The successful spot Ether ETF issuers include BlackRock, Fidelity, 21Shares, Bitwise, Franklin Templeton, VanEck, and Invesco Galaxy.

They will offer a base fee between 0.15% and 0.25%, although Fidelity, 21Shares, Bitwise, Franklin, and VanEck will not charge fees on their ETFs for a given time or until their offered products reach a required threshold in net assets under management.

Notably, the approval of the final S-1 filings by the US SEC came about two months after the approval of the 19b-4 filings on May 23.

According to crypto analysts, the approval of the spot Ethereum ETFs highlights a significant milestone for the crypto industry and the democratization of finance and technology.
It also proves that the crypto market is developing and garnering support for regulation, which is essential for long-term growth.

Meanwhile, it is expected that the approved trading will serve as a positive response for the market, with Ethereum predicted to recover around this period with more flows, given that the transaction volume on the ETH L1 blockchain has slowed down as the activity has shifted to L2s and other chains such as Solana.

The introduction of Bitcoin and Ethereum ETFs has set the pace for the emergence of other crypto exchange-traded products with a Solana-based ETF, a remote possibility.

The growing interest in crypto ETFs has also changed investors’ perception of only seeing the assets as one for speculative purposes. Now, investors are beginning to make them an important part of their portfolio, and the participation of financial institutions also adds to its credibility.

The Impact of the Spot Ether ETF Trading on the Price of Ethereum

There has been a range of predictions on the potential impact of spot Ethereum ETF by industry experts.

Bitwise’s Matt Hougan gave a bullish prediction as he is optimistic that ETH prices will reach $5,000 by the end of 2024. He bases this on Ethereum’s near-zero inflation rate and the significant amount of ETH locked in staking and DeFi protocols, which could amplify the effect of ETF inflows.

However, ETF analysts like James Seyffart predict that the demand for spot Ether ETFs will only be 20% that of the spot Bitcoin ETFs simply because the market capitalization of Ether is about one-third of the size of Bitcoin.

At press time, Ethereum trades at $3,491.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.