- Ethereum ETFs from major issuers like BlackRock and Fidelity are now live following SEC approval
- Analysts predict significant market movements, with Ethereum prices potentially surging by up to 90%
- The launch of Ethereum ETFs marks a major milestone in the broader acceptance and integration of digital assets in traditional finance
Ethereum ETFs Begin Trading: SEC Approval
The day we’ve all been waiting for is finally here: Ethereum ETFs are now trading, following the SEC’s approval of issuers’ funds that replicate the world’s second-largest cryptocurrency, behind only Bitcoin, granted just yesterday.
The issuers that received approval are BlackRock (BLK), Fidelity, Franklin Templeton, Grayscale, and 21 Shares, according to the companies involved.
The approval for Ethereum ETFs came from the U.S. Securities and Exchange Commission in late May, following the approval for Bitcoin ETFs issued in January of this year. That led to a huge increase in money going into the spot ETF on Bitcoin.
In fact, it was so successful that the launch was confirmed as the most successful in the history of ETPs, as reported in a Coindesk article. Bitcoin prices reached an all-time high after a surge of over 58% in just two months.
The SEC gave the nod to Ethereum ETFs a few months ago, approving the listing and trading of eight ETFs on May 23. Here’s a quick look at the ETFs that made the cut: The ETFs that have been approved so far are the Grayscale Ethereum Trust, Bitwise Ethereum ETF, iShares Ethereum Trust, VanEck Ethereum Trust, ARK 21Shares Ethereum ETF, Invesco Galaxy Ethereum ETF, Fidelity Ethereum Fund, and Franklin Ethereum ETF.
Bloomberg says that the SEC also approved Grayscale to turn its Grayscale Ethereum Trust (ETHE) into a spot ETF.
SEC’s Conditions and Market Reactions
One thing was missing, though, for trading to get started: the approval of the S-1 forms. These are the documents that the SEC requires issuers to file before they can start offering new financial products in the market. On that date, the SEC gave the nod to list these funds, saying that ETH is not a security but a commodity. The okay for listing was also given by the authorities on strict conditions, including the waiver by issuers of ETH staking through ETH ETFs.
Just a quick reminder that staking is how participants in a network earn rewards. They do this by locking their coins in cryptocurrency wallets. This is to validate network transactions or to provide liquidity to others. The SEC’s approval of Ethereum ETFs has already led to a surge of investments in funds that track Bitcoin.
The CoinTelegraph website reported, for example, that BlackRock’s Bitcoin ETF has witnessed a better-than-four-month boom in flows, with as much as $523 million pouring into the fund yesterday alone, bringing the total flows to rise to 333,000 BTC, worth $22 billion at current prices.
Expert Predictions and Broader Implications
It seems that, according to the analyst community, Ethereum ETFs will attract fewer inflows. On the other hand, some people think Ethereum prices could go up by as much as 90%. André Dragosch, head of the crypto asset manager division of ETC Group, when asked by Dow Jones, “Despite the fact that we expect significantly less net inflows from ether ETFs than bitcoin ETFs, we think the price impact will be very significant because ether has a higher sensitivity to ETP flows.”
Dragosch also pointed out that Ether prices have an average sensitivity to global flows to ETPs of about 6.15, compared to about 1 for Bitcoin. So, if there’s a 1% weekly increase in AUM from global ETH ETPs, we’re looking at an average weekly gain of 6.15% for Ether. All this means that a 15 percent increase in the value of managed fund assets (AUM) could lead to a 92 percent rally in cryptocurrency prices, according to the expert. Ethereum prices are currently retracing at around $3,450.
Just yesterday, BlackRock confirmed the SEC’s approval for its iShares Ethereum Trust ETF (ETHA). “Our clients are looking to get more into digital assets through exchange-traded products (ETPs) that provide convenient access, liquidity, and transparency,” commented Jay Jacobs, head of the U.S. thematic and active ETFs division.
In an interview with CNBC, BlackRock CEO Larry Fink said that Bitcoin is “a legitimate financial instrument.” He also believes that Bitcoin has a place in investment portfolios.
Trump’s Support Boosts Bitcoin Frenzy
It looks like more and more people are getting on board with cryptocurrency, including former President and Republican White House candidate Donald Trump. He’s been saying for a while now that the Biden administration is over-regulating the industry and its players after the crypto crisis in 2022.
Trump, who had previously called Bitcoin a “scam,” called cryptocurrencies “incredible” in an interview with Bloomberg that was published last week. In the interview, he also discussed interest rates, the Fed, and taxes. The so-called “Trump Trade” would include bets on the crypto world, so the attack on the tycoon has triggered a real frenzy on Bitcoin.
