US SEC approves Ethereum ETFs, Grayscale spot Ether ETFs launch on NYSE Arca

US SEC approves Ethereum ETFs after years regulatory process.
Grayscale has launched two spot Ether ETFs on NYSE Arca after the SEC’s approval.
The SEC has also approved VanEck Ethereum ETF.

In a landmark decision for the cryptocurrency investment space, the US Securities and Exchange Commission (SEC) has granted approval for Grayscale and VanEck Ethereum exchange-traded funds (ETFs), paving the way for broader institutional and retail investor access to Ethereum (ETH).

This move marks a significant milestone in the regulatory landscape for digital assets in the United States.

‘Notice of Effectiveness’ for VanEck Ethereum ETF

The VanEck Ethereum ETF, which has been in the pipeline for over three years, received its “Notice of Effectiveness” on July 22, 2024.

This regulatory green light follows a protracted process of filings and amendments, including the crucial S-1 registration form and Rule 424(b)(3) prospectus, which were amended several times to meet SEC compliance requirements, detail the ETF’s structure and offerings.

VanEck’s approval comes amid a flurry of activity in the crypto ETF sector. Ether ETFs from BlackRock, Fidelity, 21Shares, Bitwise, Franklin Templeton, and Invesco Galaxy were also approved to begin trading on Tuesday, July 23.

This development further highlights the growing acceptance of cryptocurrency-based investment products in traditional financial markets.

Two Grayscale Ether ETFs launch on NYSE Arca after SEC’s greenlight

While a majority of the submitted Ethereum ETFs were approved on July 22, the Grayscale’s Ethereum ETFs remained unapproved until July 23 morning when they were approved.

Immediately after their approval, the two Ether ETFs were launched on NYSE Acra.

.They did the same for GBTC, waited until the morning of launch pic.twitter.com/iTDwb3hpDi

— Scott Johnsson (@SGJohnsson) July 22, 2024

Grayscale’s ETFs, the Grayscale Ethereum Trust (ETHE) and the Grayscale Ethereum Mini Trust (ETH), began trading on July 23, 2024.

The ETHE, which is currently the world’s largest Ether-based ETF with $9.19 billion in assets, will charge investors a 2.5% management fee.

In contrast, the Ethereum Mini Trust has waived its fees for the first six months or until it accumulates $2 billion in assets, after which a 0.15% fee will apply, making it the most cost-effective spot Ether ETF available in the U.S.

John Hoffman, Grayscale’s managing director, emphasized the transformative potential of these ETFs, stating, “ETH and ETHE will allow investors to tap into Ethereum’s ability to create markets, reshape financial systems, and drive innovation through decentralized finance (DeFi) and other applications, all without the need to directly manage Ether.”

In preparation for the ETF launches, Grayscale transferred over $1 billion worth of Ether to Coinbase on July 22. This transfer was crucial for aligning with the new product structure and mitigating potential outflows from existing investors.

Notably, ETHE holders will receive the new Ether-backed product at a 1:1 ratio, avoiding any capital gains tax implications.

Analysts predict the approval of Ethereum ETFs could spur ETH price surge

The SEC’s approval and the subsequent launch of these ETFs signal a burgeoning acceptance of cryptocurrency assets in mainstream financial products.

Market analysts, including Bloomberg’s James Seyffart, anticipate that these ETFs could attract substantial investment flows, potentially driving Ether’s price higher.

Some experts, like Bitwise’s Matt Hougan, forecast that Ether’s price might surpass its all-time high, projecting a rise to over $5,000 by the end of 2024.

At press time, Ethereum (ETH) was trading at $3,513.09 up from a low of $3,384 on July 19.

The advent of these regulated Ethereum investment vehicles represents a significant step forward for the cryptocurrency market, offering new opportunities for investors and reflecting an evolving regulatory approach to digital assets.