The United States Securities and Exchange Commission (SEC) has approved two spot Ethereum exchange-traded funds (ETFs) for listing on the New York Stock Exchange’s (NYSE) Arca electronic trading platform.
According to a filing on 17 July, the approved funds are the Grayscale Ethereum Mini Trust and the ProShares Ethereum ETF, bringing the total number of approved ETFs to 10.
This approval of the Form 19b-4 filing permits the NYSE to facilitate the trading of these funds. However, the issuers must await final comments on their S-1 filings before the ETFs can officially list.
A Grayscale spokesperson expressed excitement over the SEC’s approval of the Grayscale Ethereum Mini Trust’s Form 19b-4. They emphasised Grayscale’s ongoing engagement with the SEC to secure full regulatory approval for US spot Ethereum exchange-traded products (ETPs).
In May, Grayscale had received SEC approval to convert its Grayscale Ethereum Trust (ETHE) into an ETF. It now plans to distribute shares of the new Mini Trust to holders of the ETHE fund.
Launched in 2017, the Grayscale Ethereum Trust was among the first institutional investment vehicles for spot Ethereum.
Additional spot Ether ETFs await approval
The SEC has reportedly given preliminary approval to at least three issuers to start listing spot Ether ETFs as early as 23 July.
Currently, eight spot Ether ETFs are awaiting final regulatory approval after extensive discussions and amendments to their S-1 filings with the SEC.
The ProShares Ethereum ETF, a later entrant, filed its Form 19b-4 about three weeks after its competitors had already received approval.
Consequently, the ProShares fund is not among the eight expected to be listed next week.
James Seyffart, a Bloomberg ETF analyst, highlighted the asset allocation strategy for the Grayscale Ethereum Mini Trust, which aims to ensure stability and mitigate potential outflows during its initial launch.
While the ProShares Ethereum ETF has joined the race later, these ETFs represent a broader trend of increasing interest in listing spot Ethereum ETFs pending final SEC approvals.
This careful approach reflects the ongoing deliberations between ETF issuers and the SEC to balance investor protection with the rising interest in digital assets.
Fee structures and future listings
Upcoming Ethereum ETFs, including those from Franklin Templeton, VanEck, and Fidelity, are expected to feature an initial fee-free period to attract investors.
In contrast, Grayscale’s Ethereum products will maintain a fee structure similar to its Bitcoin-focused funds, leveraging their established brand and expertise in cryptocurrency investments.
Bitwise, another applicant for an Ethereum Spot ETF, updated its S-1 form, setting a fee of 0.20%.
Earlier this week, the SEC reportedly gave “preliminary approval” to three asset managers for their spot Ethereum ETFs: BlackRock, Franklin Templeton, and VanEck.
According to Reuters, these approvals depend on the submission of final offering documents by the end of this week.
Additionally, Fidelity, ARK 21Shares, Grayscale, Bitwise, and Invesco Galaxy are also preparing to launch their Ether products next week.
One source indicated that all eight spot Ether ETFs are expected to launch simultaneously, similar to the SEC’s approach with spot Bitcoin ETFs.
Bloomberg ETF analyst, Eric Balchunas, had shared that the SEC instructed issuers to submit their final S-1 filings by 16 July, with fees attached to their spot Ether ETFs.
The SEC is expected to approve the S-1s after trading hours on Monday, allowing the spot Ether ETFs to begin trading on Tuesday, 23 July.
Bitwise’s Chief Compliance Officer, Katherine Dowling, noted fewer issues with the SEC, indicating nearing approval.
Bitwise’s Chief Investment Officer, Matt Hougan, speculated that the spot Ether ETFs could attract up to $15 billion in inflows within 18 months, mirroring the success of spot Bitcoin ETFs.
If approved, these spot Ether ETFs would be listed on major exchanges like the Nasdaq, NYSE, and the Chicago Board Options Exchange.
