Highlights:
- Spot Ethereum ETFs will begin trading on Cboe on July 23.
- ETH ETF issuers have updated their fee details.
- The ETFs could drive Ethereum prices higher and spark global crypto ETF adoption.
On July 20, the Chicago Board Options Exchange (Cboe) issued listing notifications for five new spot Ethereum (ETH) exchange-traded funds (ETFs) set to begin trading on July 23. The notifications clarify that the funds are awaiting final regulatory approval.
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These include the Invesco Galaxy Ethereum ETF (QETH), the VanEck Ethereum ETF (ETHV), the Fidelity Ethereum Fund (FETH), the Franklin Ethereum ETF (EZET), and the 21Shares Core Ethereum ETF (CETF). Analysts and market observers have previously predicted that the United States Securities and Exchange Commission (SEC) will approve spot Ethereum ETF trading by July 23. However, Cboe’s new listing has confirmed that previous optimism.
Cboe new listings…
It’s happening.
Almost go time. pic.twitter.com/V1wCcxYoCH
— Nate Geraci (@NateGeraci) July 19, 2024
Firms looking to launch their spot Ethereum ETFs received SEC approval of 19b-4 forms in May. This permits the listing of several spot Ether ETFs. However, the regulator still needed to approve each fund issuer’s S-1 registration statements before the new products could begin trading.
On July 15, senior Bloomberg ETF analyst Eric Balchunas reported that the SEC had instructed issuers to submit their final S-1 amendments for a trading launch next week. The issuers filed amended S-1 forms on July 18, disclosing final details for their funds, including sponsor fees.
Sponsor Fee for Spot Ethereum ETFs Set to Begin Trading on Cboe
Firms revealed their fee amounts in amended registration statements on Wednesday. Fidelity set its fee at 0.25% but announced it would waive this fee until the end of 2024. Franklin Templeton set a fee of 0.19% but will waive it on the first $10 billion of the fund’s assets until January 31, 2025. VanEck disclosed it would waive ETF fees until 2025 or until assets reach $1.5 billion.
ETF issuer 21Shares set a 0.21% fee, which will be waived for six months starting from the listing date or until the first $500 million in assets, whichever comes first, according to its amended S-1 registration statement. Earlier, on July 9, Invesco and Galaxy set a 0.25% fee for the Invesco Galaxy Ethereum ETF.
In addition to these five issuers, other ETF applicants also disclosed their sponsor fees in amended S-1 forms. BlackRock set its Ethereum ETF sponsor fee at 0.25%, 31% higher than Franklin Templeton’s fee. Bitwise announced a 0.20% fee with an initial 6-month discount for the first $500 million in assets. However, Grayscale surprised the crypto community with a 2.5% fee, ten times higher than the others. Geraci believes this could be a major mistake, similar to past issues with GBTC, criticizing Grayscale for prioritizing short-term revenue over long-term strategy.
Okay everyone. Here are the details for the #Ethereum ETFs that we expect to launch next week. We are only missing details for Proshares's ETF. 7 of the 10 funds have fee waivers. pic.twitter.com/5v3QnHOeub
— James Seyffart (@JSeyff) July 17, 2024
Spot Ethereum ETFs Could Boost Prices and Global Adoption
The introduction of these ETFs is expected to boost Ethereum’s liquidity and market depth. Analysts forecast that they will attract a wide range of institutional investors who have been hesitant about direct cryptocurrency investments due to regulatory concerns. Bitwise CIO Matt Hougan predicts that the new spot Ethereum ETFs will push the digital asset’s value to new all-time highs, exceeding $5,000.
The launch of these ETFs could start a trend of adding digital assets to traditional financial products. The SEC’s decision might encourage other regions to adopt crypto ETFs, leading to global expansion. Some firms are working on ETFs for other major crypto tokens like Solana and Injective. However, experts think the lack of a regulated futures market for these tokens might make approval harder.
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