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Final Approval Granted: The SEC has approved eight spot Ethereum ETFs, which will begin trading on Tuesday. This milestone is significant for both Ethereum and the broader crypto market, as these ETFs are expected to attract substantial investment.
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Market Impact and Predictions: Spot Bitcoin ETFs, approved earlier this year, have brought in billions. According to Bloomberg’s Eric Balchunas, Ethereum ETFs could capture 10-15% of the assets held by Bitcoin ETFs, amounting to an estimated $5-$8 billion. This is a substantial figure for a new launch.
Which ETH ETFs are approved?
Some spot Ethereum exchange-traded funds have received the go-ahead and can begin trading on Tuesday, following weeks of back-and-forth on edits to registration statements. As of Monday evening, the following spot ether ETFs had effective prospectuses, meaning the SEC had cleared them for trading:
Thoughts from Market Leaders
"The launch of the 21Shares Core Ethereum ETF (CETH) represents a significant achievement for 21Shares and U.S. investors," said Ophelia Snyder, co-founder and president of 21Shares, in an emailed statement. "Today's approval further validates crypto as a lasting asset class."
Firms aiming to launch their spot Ethereum ETFs received approval for 19b-4 forms from the U.S. Securities and Exchange Commission in May. However, they needed their registration statements to become effective before proceeding with the launch. The approvals were unexpected due to a lack of engagement between the SEC and issuers. However, in the week leading up to the deadlines, the SEC began notifying exchanges that the Ethereum ETFs would be approved that week.
Cynthia Lo Bessette, head of Digital Asset Management at Fidelity, stated that their spot Ethereum ETF would provide investors exposure to ether through "thoughtful index and product design, supported by a dedicated operations and trading team and industry-leading security." Lo Bessette also mentioned:"This exemplifies Fidelity's rich history and commitment to meeting the evolving needs of our customers."
Spot Bitcoin ETFs, approved earlier this year, have already attracted billions of dollars. Senior Bloomberg ETF analyst Eric Balchunas predicted in an interview with The Block in May that Ethereum ETFs might draw lower demand than Bitcoin ETFs, possibly capturing 10 to 15% of the assets that Bitcoin products received.
"That would place them at around $5 to $8 billion, which is quite good for a new launch in the first couple of years," he said. Nate Geraci, president of The ETF Store, mentioned at an event hosted by The Block on X on Monday that the current spot ether market is less than a third the size of the Bitcoin market.
"In my view, that's a reasonable proxy for what to expect from spot ether ETFs," Geraci added. "I anticipate we'll see about a third of the demand that we've observed from spot Bitcoin ETFs."
How Will Ethereum Perform Against Bitcoin After Spot ETF Launch?
Additionally, the timing of the approval is noteworthy. The SEC has approved the launch date of the Ethereum ETF to coincide with the largest Bitcoin conference of the year. This week isn't just about Bitcoin anymore, as Ethereum is stepping into the spotlight with its ETF launch tomorrow. Currently, BTC and ETH are the only two cryptocurrencies with an ETF in the US, but more are expected to follow in the coming year. The first Solana (SOL)-based ETF applications have already been submitted, and other cryptocurrencies like XRP are expected to join the ETF conversation soon.
CBOE will facilitate most of the initial trading of Ether ETFs, with other exchanges likely to follow suit shortly after trading begins. With the debut of the Ethereum ETFs, the entire cryptocurrency market is anticipated to surge, similar to the reaction seen after the approval of Bitcoin ETFs in January.