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Spot ethereum exchange-traded funds (ETFs) are set to debut on Tuesday, July 23, 2024, following approval from the U.S. Securities and Exchange Commission (SEC). Blackrock, the world’s largest asset manager, announced that its Ishares Ethereum Trust ETF (ETHA) will commence trading on Nasdaq on Tuesday, featuring a one-year fee waiver of 0.12% for the first $2.5 billion in assets under management (AUM).
Ethereum ETFs Approved by SEC Set Stage for New Crypto Investments
Nine spot bitcoin ETFs are slated for public trading, including two from Grayscale. Grayscale’s Ethereum Trust (ETHE) will be transformed into a publicly traded fund, and the firm’s Ethereum Mini Trust (ETH) will also make its debut. Additionally, asset managers such as Franklin Templeton, Vaneck, Bitwise, 21shares, Blackrock, Invesco, and Fidelity will launch spot ether ETFs on Tuesday.
On Monday afternoon at approximately 4:58 p.m. EDT, Bloomberg ETF analyst Eric Balchunas posted about the listings on X. “It’s official: Spot ETH ETFs have been made effective by the SEC. The 424(b) forms are rolling in now, the last step = all systems go for tomorrow’s 930am launch. Game on,” Balchunas said. Blackrock also released a statement, and Jay Jacobs, U.S. Head of Thematic and Active ETFs, spoke about the increasing demand for these digital asset funds.
“Our clients are increasingly interested in gaining exposure to digital assets through exchange-traded products (ETPs) which provide convenient access, liquidity and transparency,” Jacobs said. “Ethereum’s appeal lies in its decentralized nature and its potential to drive digital transformation in finance and other industries.”
Grayscale’s ETHE, which started as an over-the-counter (OTC) traded product, is the largest spot ETH fund due to its early entry. However, Blackrock has swiftly surpassed Grayscale’s Bitcoin Trust (GBTC), with Blackrock’s IBIT now holding the largest BTC ETF reserves. As of now, Blackrock manages 327,179.76 BTC, while GBTC holds 272,061.82 BTC. Grayscale’s ETHE has experienced a discount to its net asset value (NAV) since November 2021.
ETHE’s discount to NAV reached a low of 57.69% in December 2022 but has now decreased to 0.6%, nearing parity. A similar pattern occurred with GBTC when it transitioned from an OTC-traded product into an ETF. This landmark approval of spot ethereum ETFs marks a pivotal moment in the integration of cryptocurrencies into mainstream finance.
As these funds begin trading on Tuesday, they will offer investors another avenue to gain exposure to ethereum’s potential. The competition among asset managers and the narrowing discount to NAV for existing trusts signal a maturing market, potentially attracting more institutional interest and reshaping the crypto investment landscape. The approval of ETH ETFs paves the way for future crypto ETFs like solana (SOL), and others.
Despite the news, ethereum (ETH) declined by 2.5% against the U.S. dollar on Monday evening around 8:30 p.m. EDT. ETH is currently trading at $3,447 per unit, showing a 1.2% decrease over the past week.