• Spot Ethereum ETFs have received final approval from the SEC and can begin trading on Tuesday
• Firms like 21Shares, Bitwise, BlackRock, Fidelity, VanEck, and Invesco Galaxy have had their registration statements go effective
• While spot Bitcoin ETFs attracted billions in assets, demand for Ethereum ETFs is expected to be lower, potentially 10-15% of Bitcoin ETF inflows
The U.S. Securities and Exchange Commission has approved several spot Ethereum exchange-traded funds (ETFs), clearing the way for them to begin trading next week. This marks a major milestone for the Ethereum ecosystem.
SEC Gives Final Approval for Spot Ethereum ETFs
The SEC allowed registration forms from 21Shares, Bitwise, BlackRock, Fidelity, VanEck and Invesco Galaxy to go effective on Monday afternoon. This final sign-off means these firms can start trading their spot Ethereum ETF products on Tuesday.
The launch of the 21Shares Core Ethereum ETF (CETH) “marks a significant milestone for 21Shares and for US investors,” said Ophelia Snyder, co-founder and president of 21Shares. “Today’s approval represents further proof that crypto as an asset class is here to stay.”
Months of Back-and-Forth Preceded Approvals
Firms looking to launch spot Ethereum ETFs received initial approval from the SEC in May. However, they still needed their full registration statements to go effective before proceeding.
The initial approvals came as a surprise, as the SEC had not been engaging much with issuers. But in the weeks before the deadlines, the agency had a change of heart and began signaling it would green light the Ethereum ETFs.
Lower Demand Expected Compared to Bitcoin ETFs
Spot bitcoin ETFs launched earlier this year and have attracted billions in assets. However, analysts expect spot Ethereum ETFs will see more modest demand in the range of $5-8 billion.
“Ethereum ETFs may attract lower demand than Bitcoin ETFs and may get 10% to 15% of the assets that bitcoin products received,” said Eric Balchunas, senior ETF analyst at Bloomberg.
The spot Ether market is currently less than a third the size of the Bitcoin market. As such, demand for spot Ether ETFs could be around a third of what we’ve seen for spot bitcoin ETFs, according to Nate Geraci of The ETF Store.
Next Steps: Options, Staking and More
With spot Ethereum ETFs approved, exchanges may now consider launching options on those products. However, they would likely need to get additional regulatory approval from the SEC first.
Issuers may also look to include staking components in their Ethereum ETFs down the line. Initial filings featured staking, but it was removed to gain approval. The SEC has previously taken issue with staking services.
So while staking and options could eventually come, analysts say it’s a matter of when, not if. Further conversations with regulators will be needed to determine the timeline.
