- The U.S. Securities and Exchange Commission (SEC) has approved an Ethereum ETF after years of regulatory hurdles.
- Grayscale Launches Two Spot Ether ETFs on NYSE Arca Following SEC Approval
- The SEC also approved the VanEck Ethereum ETF.
In a landmark decision in the cryptocurrency investment space, the U.S. Securities and Exchange Commission (SEC) has approved the Grayscale and VanEck Ethereum Exchange Traded Fund (ETF), opening the way for more institutional and retail investors to access Ethereum (ETH).
This action represents a significant milestone in the digital asset regulatory environment 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 an “effective notice” on July 22, 2024.
This regulatory approval followed a lengthy filing and amendment process that included the requisite S-1 registration form and Rule 424(b)(3) prospectus, which were amended several times to meet SEC compliance requirements, detailing the ETF’s structure and offering.
VanEck’s approval comes amid a flurry of activity in the crypto ETF space, with Ether ETFs from BlackRock, Fidelity, 21Shares, Bitwise, Franklin Templeton, and Invesco Galaxy also getting the go-ahead to begin trading on Tuesday, July 23.
These developments further demonstrate the growing acceptance of cryptocurrency-based investment products in traditional financial markets.
Two Grayscale Ether ETFs Launch on NYSE Arca After SEC Approval
While most of the submitted Ethereum ETFs were approved on July 22, Grayscale’s Ethereum ETF remained unapproved until the morning of July 23.
Shortly after approval, two Ether ETFs were launched on NYSE Acra.
.They did the same with GBTC and waited until the morning of the launch day. pic.twitter.com/iTDwb3hpDi
— Scott Johnson (@SGJohnsson) July 22, 2024
Grayscale’s ETFs, Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Mini Trust (ETH), began trading on July 23, 2024.
ETHE, the world’s largest ether-based ETF with $9.19 billion in assets, charges investors a 2.5% management fee.
In contrast, the Ethereum Mini Trust is fee-free until assets reach $2 billion or for the first six months, then charges a 0.15% fee thereafter, making it the most cost-effective spot Ether ETF available in the US.
Grayscale Managing Director John Hoffman highlighted the transformative potential of these ETFs, saying, “With ETH and ETHE, investors can leverage Ethereum’s ability to create markets, reshape the financial system, and drive innovation through decentralized finance (DeFi) and other applications, all without having to manage Ether directly.”
In preparation for the ETF launch, Grayscale transferred $1 billion worth of Ether to Coinbase on July 22. This transfer was important to align with the new product structure and mitigate potential outflows from existing investors.
In particular, ETHE holders will receive new Ether-based products at a 1:1 ratio, so there will be no capital gains tax issues.
Analysts predict that Ethereum ETF approval could spur a surge in ETH price.
The SEC’s approval and subsequent launch of these ETFs demonstrates the rapid acceptance of crypto assets in mainstream financial products.
Market analysts, including Bloomberg’s James Seifert, expect these ETFs to attract significant investment flows, potentially pushing the price of Ethereum higher.
Some experts, including Bitwise’s Matt Hougan, have predicted that Ethereum’s price could surpass its all-time high, rising to over $5,000 by the end of 2024.
At the time of writing, Ethereum (ETH) was trading at $3,513.09, up from its low of $3,384 on July 19.
The advent of regulated Ethereum investment vehicles represents a major step forward for the cryptocurrency market, providing new opportunities for investors and demonstrating an evolving regulatory approach to digital assets.