Is an Ethereum ETF on the Horizon?

There is much excitement in the Ethereum cryptocurrency market at the moment with talk of ETF trading being listed any time soon. Ethereum ETFs have recently been approved by the Securities and Exchange Commission (SEC). This much-anticipated approval means that the ether (ETH) – Ethereum’s blockchain currency – will be the second cryptocurrency to have an ETF given the green light. Earlier this year, Bitcoin became the first cryptocurrency to gain ETF approval from the SEC; an historic milestone which resulted in $4.6 billion worth of shares in the first day of trading alone.

After the hugely successful first day of trading for Bitcoin ETFs, the cryptocurrency asset has only continued to rise. It was therefore only a matter of time that the second most prominent blockchain platform, Ethereum, got in on the ETF trend. But can an Ethereum ETF expect to see the same impressive success as its predecessor? At present, the spot ether ETF has still to start trading, having faced several delays as of late, so only time will tell. It is anticipated that the asset will see similar price rises. Right now, if you convert ETH to USD, you get just over $3126 for 1 ether (at time of writing), so it might be of interest to you to invest in the cryptocurrency before the anticipated rise.

What are ETFs?

An ETF is short for ‘exchange traded funds’ and refers to a type of pooled investment or basket of securities that holds a number of varying assets, such as commodities or stocks. ETFs can be bought and sold on stock exchanges, which makes these products more accessible to different investors. It also makes them more secure and means that they are substantially regulated. Furthermore, ETFs can be designed to track a variety of investment strategies, such as a wide range of securities or the price of a commodity. There is a diverse range of ETFs available to potential investors for elements such as speculation, revenue generation, and price increases. Unlike mutual funds, which trade just one time each day, the share prices of ETFs tend to rise and fall throughout the day as the investments are bought and sold.

What does an Ethereum ETF mean for investors?

The approval of another cryptocurrency ETF after Bitcoin’s green light symbolizes more of an acceptance of the digital asset class and suggests more clarity in terms of regulation. This in turn could increase the demand for investment in Ethereum and its native cryptocurrency. However, investors would not necessarily have to directly own ether to reap the benefits. A spot ether ETF would allow an investor exposure to the price fluctuations of the cryptocurrency without having to invest in the digital asset directly.

Just like Bitcoin, which started trading in ETFs straight after approval in January, Ethereum is expected to experience a prominent surge in value once its ETFs are listed and ready for trading. This moment will symbolize a major milestone for Ethereum that will give it the accessibility and legitimacy given by traditional ETFs, such as Bitcoin. Subsequently, this could catch the attention of new investors to the market, especially those looking for a more credible and secure route to access the world of cryptocurrency.  

Who has filed for a spot ether ETF?

Back in May, a number of 19b-4 forms for spot Ethereum ETFs had been approved by the SEC from several organizations. These included Bitwise, VanEck, BlackRock, Franklin Templeton, Grayscale, Ark, Invesco Galaxy, and Fidelity. However, whilst these applications have been given the green light, these companies will require further applications – in the shape of s-1 registration forms – before they can start trading in ETFs.

But a recent development, which saw VanEck file an s-1 form to the SEC, could mark a major step in the process of approval for the next batch of crypto spot exchange-traded funds. The American multibillion dollar investment management company filed the form in early July 2024 for a spot VanEck Ethereum Trust. Moreover, since VanEck’s application, six more companies applying for spot Ethereum ETFs have filed s-1 forms. Could this mean that an Ethereum ETF is just around the corner?

When will Ethereum ETFs be listed?

The SEC gave the go-ahead for Ethereum ETFs at the end of May 2024; an unexpected turn of events as several industry analysts predicted the proposal would be rejected. It is unknown exactly what prompted the commission to grant the approval, but it has been speculated that the green light for Bitcoin ETFs earlier in the year might have been a contributing factor in the decision.

However, in spite of the Ethereum ETF approval, the actual listing of the new Ethereum ETFs has come up against several delays. This has been somewhat unexpected, especially as Bitcoin ETFs were listed and able to be traded immediately following approval. Assuming that the SEC approves the revised s-1 forms in the short term, then trading of Ethereum ETF could be as soon as late July. Whether we will see an Ethereum ETF as soon as that though remains to be seen.

Conclusion

There has been a lot of excitement in the cryptocurrency market about the much-anticipated Ethereum ETF. However, whilst initial approval has been given to a spot ether ETF, we are yet to see it actually listed. This does not mean that there will be no Ethereum ETF though. While there is no clear timeline of when the asset will be listed, we can definitely expect to see an Ethereum ETF on the horizon very soon.