The US Securities and Exchange Commission (SEC) has excited the crypto market with “preliminary approval” to three asset managers for the launch of spot Ethereum (ETH) exchange-traded funds (ETFs), reported Forbes.
On 15 July 2024, the SEC informed BlackRock, Franklin Templeton, and VanEck that their spot Ethereum ETFs could begin trading as early as Tuesday, 23 July 2024. However, the asset managers have to submit their final S-1 filings by 16 July 2024.
Interestingly, other prominent players like Fidelity, ARK 21Shares, Grayscale, Bitwise, and Invesco Galaxy are also in the running to launch their ETH products.
Reuters: SEC has given “preliminary approval” to at least three of eight spot eth ETF issuers to begin trading next Tuesday…
All eight expected to launch at same time tho. https://t.co/ngACRMnjJr pic.twitter.com/BJfuqR8Ju9
— Nate Geraci (@NateGeraci) July 15, 2024
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Contingent Approval Of Spot ETH ETFs
The approval of spot Ethereum ETFs is expected to have a profound impact on the market. Analysts predict substantial inflows into these investment vehicles, with estimates ranging from $5 billion to $20 billion in the first year.
The SEC’s decision to approve these ETFs, however, is contingent upon the submission of final offering documents, which must include details on management fees.
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Invesco and Galaxy have set their fees at 0.25%, while VanEck and Franklin Templeton have opted for slightly lower fees of 0.20% and 0.19%, respectively.
These fees are significantly lower than the 2.50% charged by Grayscale’s Ethereum Trust, making the new ETFs more attractive to investors.
With trading set to begin on 23 July 2024, these ETFs are poised to attract significant capital inflows, drive up the price of Ethereum, and enhance its appeal to institutional investors.
Optimistic Market Forecasts Post Approval
Following the news of the SEC’s preliminary approval, the price of ETH surged by over 7%, outpacing Bitcoin’s 6% gain.
Some analysts believe that the launch of these ETFs could push ETH’s price towards $4,000, with more optimistic predictions suggesting it could reach as high as $6,500 by the end of the year.
Gemini, a leading cryptocurrency exchange, forecasts that the spot ETH ETFs could see inflows of up to $5 billion within the first six months, while Steno Research predicts inflows could reach as high as $20 billion in the first year.
The approval of spot ETH ETFs follows the successful launch of Bitcoin ETFs earlier this year. The BTC ETFs have amassed approximately $15 billion in assets since their inception.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
