Just In: VanEck files S-1 for Spot Ethereum ETF

Highlights:

• VanEck filed an S-1 registration form for a spot Ethereum ETF with the SEC.
• The proposed VanEck Ethereum ETF aims to trade on the Cboe BZX Exchange under the ticker symbol ‘ETHV.’
• The SEC’s decision on the approval of spot Ethereum ETFs is highly anticipated.

Asset management firm VanEck has officially submitted an S-1 registration form to the US Securities and Exchange Commission (SEC) for a spot Ethereum exchange-traded fund (ETF). The filing represents a critical step toward potentially launching the first spot Ethereum ETF in the United States.

VanEck’s Spot Ethereum ETF Proposal

VanEck’s proposed Ethereum ETF aims to reflect Ethereum’s price performance minus expenses. The ETF would trade on the Cboe BZX Exchange under the ticker symbol “ETHV.” The fund plans to hold actual Ethereum and value its shares daily based on the MarketVector Ethereum Benchmark Rate, which uses prices from VanEck’s top five Ethereum trading platforms.

VanEck spot eth ETF S-1 amendment is in…

Already knew fee… 20bps. https://t.co/kUUfNg4Fpq pic.twitter.com/seMJzkv88Y

— Nate Geraci (@NateGeraci) July 8, 2024

Notably, the filing specifies that the trust and associated parties will not engage in Ethereum staking or other yield-generating activities with the fund’s assets. Initially, the ETF will only permit cash creations and redemptions by authorized participants.

The SEC has not approved any spot crypto ETFs, citing market manipulation and investor protection concerns. However, ETF analysts like Nate Geraci predict that issuers are gearing up to launch within the next few weeks. This potential approval is highly anticipated as it could provide more direct exposure to Ethereum’s price movements than existing futures-based products.

Industry Reactions and Expectations

According to Bloomberg ETF analyst Erich Balchunas, VanEck’s filing is expected to follow similar filings from other issuers, except for Bitwise, which filed its S-1 last week. The SEC approved 19b-4 forms for eight spot Ethereum ETFs, including Bitwise and VanEck, on May 23. Issuers still need their S-1 statements to become effective before trading can begin.

First S-1 just rolled in today from VanEck.. they already had their fee so nothing to see here really, they just putting ball back in SEC's court. Expecting the rest today except for Bitwise who did theirs last week. pic.twitter.com/gF6OZTKIrs

— Eric Balchunas (@EricBalchunas) July 8, 2024

Bitwise, for instance, filed its amended registration form on July 3. Both Bitwise and VanEck have announced they will waive initial fees at the outset. VanEck has set a fee of 0.2% if the fund surpasses $1.5 billion in total assets. Earlier this month, VanEck predicted that Ethereum could reach $22,000 by 2030.

Monday marks the deadline for filing amended registration statements for spot Ethereum ETFs. VanEck’s amended S-1 included minimal changes, such as details around custody. Other firms are expected to submit their applications throughout the day.

Looking Ahead

The SEC’s decision on VanEck’s spot Ethereum ETF is highly anticipated. SEC Chair Gary Gensler stated that the launch of the spot Ethereum ETFs is “going smoothly.” He emphasized that it is up to the asset managers to make full disclosures so the registration statements can become effective. Gensler added that the Division of Corporation Finance handles hundreds, if not thousands, of these processes over a career, indicating confidence in the regulatory review.

As the crypto industry awaits the SEC’s approval of the first spot Ethereum ETF, VanEck’s filing marks a significant step toward potentially listing the product this summer. The move could attract substantial institutional inflows to Ethereum, mirroring the impact of Bitcoin ETFs on the crypto market. Ethereum currently trades at $2,980, down 20% from the approval of 19b-4 applications.

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