The US SEC approved an Ethereum ETF after a multi-year regulatory process. Grayscale launched two spot Ethereum ETFs on NYSE Arca after SEC approval. The SEC also approved the VanEck Ethereum ETF.
In a landmark decision for the cryptocurrency investment space, the U.S. Securities and Exchange Commission (SEC) has approved Grayscale and VanEck’s Ethereum exchange-traded fund (ETF), paving the way for wider access to Ethereum (ETH) for institutional and retail investors.
The move marks a significant milestone in the regulatory environment for digital assets in the United States.
VanEck Ethereum ETF “Validity Notice”
The VanEck Ethereum ETF, which has been in the planning stages for over three years, received a “Notice of Effectiveness” on July 22, 2024.
The regulatory go-ahead came after a lengthy filing and amendment process that detailed the ETF's structure and offering, including a crucial S-1 registration form and Rule 424(b)(3) prospectus, which were amended several times to meet SEC compliance requirements.
VanEck's approval comes amid a flurry of activity in the crypto ETF sector, with Ethereum ETFs from BlackRock, Fidelity, 21Shares, Bitwise, Franklin Templeton and Invesco Galaxy also being approved to begin trading on Tuesday, July 23.
The development further highlights the growing acceptance of cryptocurrency-based investment products in traditional financial markets.
Following SEC approval, two Grayscale Ether ETFs will list on NYSE Arca
While the majority of submitted Ethereum ETFs were approved on July 22, Grayscale's Ethereum ETF was not approved until the morning of July 23.
Shortly after approval, two Ethereum ETFs were listed on the NYSE Acra.
I did the same with GBTC and waited until the morning of the release. 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 is currently the world's largest Ethereum-based ETF with $9.19 billion in assets and charges investors a 2.5% management fee.
In contrast, Ethereum Minitrust waives fees for the first six months or until assets reach $2 billion, after which a 0.15% fee applies, making it the most cost-effective spot Ethereum ETF available in the United States.
Grayscale Managing Director John Hoffman highlighted the transformative potential of these ETFs, saying, “ETH and ETHE allow investors to tap into Ethereum's ability to create markets, reshape the monetary system, and drive innovation through decentralized finance (DeFi) and other applications — all without having to take direct control of the Ether.”
In preparation for the ETF launch, Grayscale transferred $1 billion worth of Ether to Coinbase on July 22. The transfer was crucial to align with the new product structure and mitigate potential exodus from existing investors.
Notably, ETHE holders will receive the new Ether-collateralized product at a 1:1 ratio, thus avoiding any capital gains tax implications.
Analysts predict Ethereum ETF approval could spark a surge in ETH prices
The SEC’s approval of these ETFs and their subsequent launch indicates that crypto assets are rapidly gaining acceptance into mainstream financial products.
Market analysts, including Bloomberg’s James Seifert, expect these ETFs to attract large amounts of investment capital, potentially boosting Ethereum prices.
Some experts, such as Bitwise’s Matt Hogan, predict that Ether’s price will surpass its all-time high and rise to over $5,000 by the end of 2024.
At the time of writing, Ethereum (ETH) is trading at $3,513.09, up from a low of $3,384 hit on July 19.
The emergence of these regulated Ethereum investment vehicles marks a major step forward for the cryptocurrency market, offering new opportunities for investors and reflecting an evolving regulatory approach to digital assets.
