Spot Ethereum ETFs will begin trading next week, according to a statement from the Cboe exchange, setting the stage for an investment vehicle that, if history repeats, will draw in billions of dollars of investor cash.
The Cboe listed five new ETFs that will begin trading July 23: 21Shares Core Ethereum ETF (CETF); the Fidelity Ethereum Fund (FETH); the Franklin Ethereum ETF (EZET); the Invesco Galaxy Ethereum ETF (QETH) and the VanEck Ethereum ETF (ETHV). VanEck confirmed the the expected trading date in a separate email.
Sources have told etf.com that Securities and Exchange Commission approval is expected Monday, July 22.
Approval by the Securities and Exchange Commission will cap a more than eight-month saga that was apparently boosted by Presidential election politics, while highlighting traditional finance’s efforts to address skyrocketing demand for cryptocurrency investments.
The proposed funds, which track ether, the token of the Ethereum blockchain, would become the second set of products based on the ongoing price of a major cryptocurrency to list on U.S. exchanges. Ether is the second largest digital asset with a $420 billion market capitalization, trailing only bitcoin’s $1.1 trillion market value.
Ten Spot Ethereum ETF Applicants
Ten U.S.-listed spot bitcoin funds began trading on Jan. 11, a day after the SEC ended a roughly decade long saga of rejecting applications (an 11th fund began trading in March). Those funds have generated about $16.6 billion in inflows and now manage about $55 billion in assets.
The SEC is weighing 10 spot Ethereum ETF applications, including VanEck’s ETHV. Other applicants include BlackRock, Fidelity, Grayscale, Bitwise, 21Shares, Franklin Templeton and a joint effort by Invesco Galaxy.
Cboe New Listings
Source: Cboe
Expense ratios for those funds will fall almost entirely in the 0.15% to 0.25% range, although seven of the funds will waive at least part of their fees for initial periods, and the Grayscale Ethereum Trust (ETHE), a conversion from an existing trust, will charge a 2.5% fee, according to regulatory filings last week.
Little more than two months ago, spot Ethereum ETF issuers seemed fated for a long wait amid SEC angst about potential fraud and investor protections—similar concerns to those they had in the run-up to spot bitcoin ETF approvals.
But the agency appeared to buckle to political pressures with crypto-skeptical Democrats and more receptive Republicans attempting to win over digital asset investors and developers or at least not alienate them in a tight presidential election year. Approval of a 19-B4 rules change submitted in May by the Nasdaq, NYSE and Cboe exchanges where the funds will trade increased the likelihood of final approval.
Spot Ethereum funds likely debut has spurred mixed reactions from analysts, who see potentially massive potential in decentralized, smart contracts networks for financial services and a range of other industries, but are uncertain if investors will embrace ETFs based on ether.