Spot Ethereum ETF Countdown – Approval is Imminent

Traders eagerly await SEC approval for the first spot ether ETFs, expected soon after the successful debut of spot bitcoin ETFs in early 2024.

Finnancial expert Jared Blikre analyzes the crypto market’s current state and the potential impact of Ethereum ETFs.

The crypto market is under pressure, with Bitcoin and Ethereum both down over 20% from recent highs. However, there’s excitement about new ETFs launching imminently. Following the January listing of spot Bitcoin ETFs, major players like BlackRock and Fidelity are updating their S-1 forms with the SEC to introduce spot ETH ETFs, aiming to enhance market liquidity.

The SEC approved Ethereum ETFs based on futures last October, but spot ETFs directly track crypto prices, unlike futures-based ETFs. The SEC had resisted spot crypto ETFs until losing a court battle with Grayscale Investments, which wanted to convert its Grayscale Bitcoin Trust (GBTC) into an ETF for the public. This legal victory allowed spot Bitcoin ETFs to debut earlier this year.

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Since January, spot Bitcoin ETFs have attracted significant investor interest. For example, the iShares BTC Trust (IBIT) has accumulated $18.1 billion in inflows, making it one of the top ETF performers this year. Conversely, the Grayscale Bitcoin Trust has seen outflows of $18.7 billion, partly due to its higher management fees compared to new zero-fee ETFs.

As spot Ethereum ETFs near launch, investors might shift from Grayscale’s ETH fund to these new lower-cost options. All indications suggest that SEC approval is imminent, with ETF managers nearly ready.

The impact of spot Ethereum ETFs on crypto prices is uncertain. Bitcoin saw a price dip on its spot ETF launch day but quickly rallied to new highs. The excitement around ETH ETFs could drive similar dynamics. The potential inclusion of these new crypto investment options in portfolios and 401(k) plans is likely to attract significant investor interest, further integrating cryptocurrencies into mainstream financial markets.

Alexander Stefanov