The U.S. Securities and Exchange Commission (SEC) has given the green light to several spot Ethereum exchange-traded funds (ETFs), allowing them to start trading on Tuesday. This follows weeks of adjustments to registration statements, marking a significant milestone for Ethereum enthusiasts and investors.
Approved Registrations:
- The SEC has allowed registration forms from 21Shares, Bitwise, BlackRock, Fidelity, Franklin Templeton, VanEck, and Invesco Galaxy to become effective as of Monday afternoon.
- Registration forms for the Grayscale Ethereum Trust and the Grayscale Ethereum Mini Trust also went effective on Monday.
Market Expectations: Despite the approval, there is skepticism about whether Ethereum ETFs will garner the same popularity as Bitcoin ETFs launched earlier this year. Crypto market maker Wintermute predicts Ethereum ETFs to attract between $3.2 billion and $4 billion in assets within their first year. In comparison, Bitcoin ETFs are expected to amass roughly $32 billion by the end of the year. This means Ethereum ETFs might receive only about 10% to 12.5% of the assets projected for Bitcoin ETFs.
Impact on Ether Price: Wintermute forecasts that if Ethereum ETFs reach their projected asset levels, the price of Ether could potentially increase by 18% to 24%, bringing it to approximately $4,200. This would mark a new high for 2024, though still below its 2021 all-time high of $4,800.
Investor Considerations:
- Staking Yield: Unlike direct Ether investments, the current form of Ethereum ETFs won’t allow investors to gain exposure to staking yields, which are a process where Ether holders can lock their holdings in the network and secure a 3% yield paid out in Ether.
- Management Fees: ETF holders will also need to pay management fees, which range from 0.15% to 2.5%.
By launching these ETFs, the SEC aims to provide more regulated and accessible investment options for those looking to invest in Ethereum, potentially bringing more stability and interest to the cryptocurrency market.
Disclaimer
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