The Ethereum spot ETF has finally been approved by the U.S. Securities and Exchange Commission (referred to as the U.S. SEC below), marking a milestone moment for Ethereum digital assets!
At 9:30 am Eastern Time on July 23, 2024, 9 Ethereum spot ETFs officially began trading on the U.S. securities market. They are:
1. Chicago Board Options Exchange (referred to as CBOE Exchange below):
- 21Shares Core Ethereum ETF (trading code CETH)
- Fidelity Ethereum Fund (trading code FETH)
- Franklin Ethereum ETF (trading code EZET)
- Invesco Galaxy Ethereum ETF (trading code QETH)
- VanEck Ethereum ETF (trading code ETHV)
2. NASDAQ Exchange:
- BlackRock's iShares Ethereum Trust (trading code ETHA)
3. New York Stock Exchange Arca Electronic Trading Platform (NYSE's Arca):
- Grayscale Ethereum Mini Trust (trading code ETH)
- ProShares Ethereum ETF (trading code EETH)
- Bitwise Ethereum ETF (trading code ETHW)
In addition, the U.S. Securities and Exchange Commission has also approved Grayscale to convert Grayscale Ethereum Trust (trading code ETHE) into an Ethereum spot ETF for trading.
On the first trading day, the total trading volume of the above Ethereum spot ETFs was approximately $434 million, with the highest trading volume for Grayscale Ethereum Trust (trading code ETHE) at $177.2 million and the lowest for 21Shares Core Ethereum ETF (trading code CETH) at only $4.69 million.
According to media reports, Bloomberg ETF analyst Eric Balchunas stated that the total trading volume reached $112 million 15 minutes after the launch of the U.S. Ethereum spot ETFs. This is a significant figure compared to the normal ETF issuance, but only about half of the trading volume on the first day of the U.S. Bitcoin spot ETF.
VanEck Ethereum ETF (trading code ETHV) reached an opening price of $50.06 on the first day of listing, the highest among the first batch of officially listed Ethereum spot ETFs. The opening price of Grayscale Ethereum Mini Trust (trading code ETH) was the lowest at only $3.26, making it the Ethereum spot ETF with the highest trading volume. The average price of other Ethereum spot ETFs is approximately between $20 and $30.
However, the performance of Ethereum digital asset ETH was relatively flat after the start of trading for the Ethereum spot ETFs. As of midnight on July 24, 2024 (Singapore time), ETH had a daily increase of 0.46%, with a market value of approximately $3455.2.
What are the differences in the newly listed Ethereum spot ETFs?
The U.S. Ethereum spot ETFs are all initiated by asset management companies, with qualified custodians holding spot ETH and relying on professional market makers to create and redeem shares.
However, the various Ethereum spot ETFs have slight differences in fees. In actual trading, most ETFs may waive fees or provide fee discounts. The actual investment fees for retail traders trading ETFs may also vary depending on the discounts provided by the selected securities brokers.
The following are the basic fees for Ethereum spot ETFs compiled from public information:
- 21Shares Core Ethereum ETF (CETF): 0.21%
- Fidelity Ethereum Fund (FETH): 0.25%, with no management fees for the full year of 2024
- Galaxy Ethereum ETF (QETH): 0.25%
- Franklin Ethereum ETF (EZET): 0.19%, exempt from fees for the first $10 billion in assets until January 31, 2025
- VanEck Ethereum ETF (ETHV): 0.2%
- Grayscale Ethereum Mini Trust (trading code ETH): 0.15%
- ProShares Ethereum ETF (trading code EETH): 1.33%
- Bitwise Ethereum ETF (trading code ETHW): 0.2%, 0% for the first $500 million or the first 6 months
- Grayscale Ethereum Trust (trading code ETHE): 2.5%
- BlackRock's iShares Ethereum Trust (trading code ETHA): 0.25%
Overall, the initial batch of Ethereum spot ETFs listed and about to be listed on the U.S. securities market have fees maintained at around 0.25%. Grayscale has the highest fee, set at 2.5%, which is 10 times higher than most other Ethereum spot ETF issuers.
Do the 5 Ethereum spot ETFs hold ETH for staking?
None of them will participate in staking.
According to Cointelegraph.com, it was reported that earlier in 2024, the initiating institutions of Ethereum spot ETFs such as Fidelity, BlackRock, and Franklin Templeton sought approval from the U.S. Securities and Exchange Commission (referred to as the U.S. SEC) to add staking in the Ethereum spot ETFs, but the U.S. SEC rejected these requests.
Information obtained from anonymous sources involved in the staking negotiation indicated that the rejection of the staking request was also due to the fact that extracting ETH from the beacon chain often takes several days, and as ETF issuers, timely redemption of ETF shares to exchange for fund assets is a requirement that must be met.
Embracing a new era of blockchain digital assets
Matt Hougan, Chief Investment Officer of Bitwise, once stated in an interview with the media: "We have now fully entered the era of blockchain digital asset ETFs. Investors can now enter the approximately 70% digital asset market through low-cost ETFs."
"In 2021, we were the first to apply for an Ethereum ETF. We have long believed that investors should have access to Ethereum through tools they find convenient and familiar," said Kyle DaCruz, Head of Digital Assets at VanEck. "If BTC is digital gold, then Ethereum is the open-source app store, the gateway to thousands of applications utilizing blockchain technology."
Research firm Steno Research has predicted that the first-year inflow of funds for Ethereum spot ETFs listed on the U.S. securities market may reach $15 to $20 billion, which is roughly equivalent to the inflow of funds for the U.S. Bitcoin spot ETF in 7 months.
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