5 Things You Need To Know About Spot Ethereum ETFs 

The
US
Securities
and
Exchange
Commission
(SEC)
approved
spot
Ethereum
ETF
(exchange-traded
fund)
products
on
July
22
and
they’re
set
to
launch
today. 

The


approval

is
seen
as
another
landmark
breakthrough
for
crypto
that
will
lead
to
greater
mainstream
adoption
of
digital
assets.

Some
analysts,
including
Bloomberg’s
Eric
Balchunas,


say

that
ETH
ETF
approvals
could
open
the
floodgates
for
more
spot
crypto
ETFs
in
the
US,
with
Solana
ETFs
widely
considered
to
be
next
in
line.  

As
the
crypto
community
speculates
on
how
these
products
will
perform,
here
are
five
key
things
you
need
to
know
about
the
latest
crypto
ETFs: 

What
Is
A
Spot
Ether
ETF? 

A
spot
ETH
ETF
is
an
investment
fund
tracking
Ether’s
spot
price
and
is
listed
on
traditional
stock
exchanges. 

The
recently
approved
Ethereum
ETFs
will
be
listed
on
the
Chicago
Board
Options
Exchange
(CBOE),
Nasdaq,
and
the
New
York
Stock
Exchange
(NYSE). 

Spot
ETH
ETFs
make
it
easier
for
investors
and
institutions
to
access
Ethereum
within
a
traditional
financial
setting.
Fund
managers
can
allocate
part
of
their
portfolio
to
Ether
ETFs
rather
than
investing
in
Ethereum
directly. 

In
the
first
quarter
of
this
year,
several
”big
fish
institutions,”
including
the


State
of
Wisconsin

and


Millennium
Management,
revealed
investments
in
spot
Bitcoin
ETFs.

The
hope
is
that
mega
fund
managers
like
them
will
soon
also
be
piling
into
Ether
ETFs. 

Who
Are
Issuing
Spot
Ether
ETFs? 

Eight
Ether
ETFs
are
expected
to
start
trading
on
Tuesday.
The
issuers
include
Wall
Street
giants
BlackRock,
Fidelity,
Franklin
Templeton,
and
VanEck. 

Crypto-native
firms
such
as
ARK
Invest
&
21Shares,
Grayscale,
Bitwise,
and
Invesco
Galaxy
are
also
among
the
issuers.

The
majority
of
the
Ethereum
ETFs
use
Coinbase
as
a
custodian.
VanEck
is
also
tapping
the
Gemini
exchange
for
clearing
infrastructure,
while
Fidelity
will
self-custody
its
Ether
for
the
ETF. 

Each
of
these
ETFs
is
offered
by
a
renowned
fund
manager
using
professional
market
makers
to
create
and
redeem
shares. 

How
Much
Are
The
Fees
For
Spot
ETH
ETFs? 

The
ETF
issuers
have
set
varying
fees
to
gain
a
competitive
edge
in
what
is
popularly
known
as
the
“fee
war.” 

BlackRock
filed
an
amended
S-1
registration
statement
on
July
27,
revealing
a
0.25%
fee
for
its
ETF.
However,
the
asset
manager
will
impose
a
0.12%
fee
for
the
first
$2.5
billion
in
net
assets. 

Fidelity
has
also
set
its
fee
at
0.25%
but
will
slash
the
fees
entirely
for
at
least
12
months.
VanEck
and
Bitwise
have
set
their
fees
at
0.20%
but
will
also
slash
them
initially. 

The
21Shares
Core
Ethereum
ETF
has
a
0.21%
fee
with
zero
fees
for
the
first
12
months
or
until
the
fund
hits
$500
million
in
net
assets. 

Invesco
Galaxy
has
set
a
0.25%
fee
with
no
waiver
period,
while
Franklin
Templeton
has
the
lowest
fee
at
0.19%. 

The
Grayscale
Ethereum
Trust
(ETHE)
has
the
highest
fee
at
2.50%,
similar
to
its
Bitcoin
ETF.
However,
its
smaller
“mini
trust
ETF”
has
a
lower
fee
of
0.25%. 

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

Is
There
Staking? 

While
spot
Ether
ETFs
are
not
allow
to
offer
staking
right
now,
SEC
Commissioner
Hester
Pierce
has
said
that
could
be
reconsidered. 

NEW:
SEC
Commissioner
Peirce
tells
me
Ethereum
ETFs
being
able
to
stake
could
be
open
to
reconsideration

“I
think
certainly
something
like
staking,
or
any
feature
of
the
product
…
those
are
always
open
for
reconsideration
as
far
as
I’m
concerned”

pic.twitter.com/SFUTPcX80z

—
Zack
Guzmán
(@zGuz)

July
17,
2024

Earlier
this
year,
issuers
including
BlackRock,
Fidelity,
and
Franklin
Templeton
included
staking
in
their
ETF
filings.
But
this
was
rejected
by
the
SEC, 
which has
previously
classified
staking
as
an
unregulated
activity
that
violates
securities
laws.

Last
year,
Kraken
made
a


$30
million
settlement

with
the
SEC
over
its
crypto
staking-as-a-service
program. 

The
SEC
is
also
pursuing
similar
charges
against
Coinbase
after


suing

the
exchange
in
June
last
year. 

What
Are
the
Anticipated
Inflows
Into
Spot
Ether
ETFs? 

Spot
Ether
ETFs
will
attract
$15
billion
in
new
assets
during
the
first
18
months,
says
Bitwise’s
Chief
Investment
Officer
Matt
Hougan. 

Hougan
said
in
a

research
note
that
$11
billion
would
flow
out
of
the
Grayscale
Ethereum
Trust
during
the
first
few
weeks,
but
new
highs
will
be
in
by
year’s
end. 

Hougan
also
anticipates
that
inflows
to
spot
ETH
ETFs
will
push
the
Ethereum
prices
to
$5,000,
up
about
44%
from
the
$3,463
it
traded
at
as
of
10:12
a.m.
EST.