The U.S. Securities but also Exchange Commission granted final approval for nine spot ether exchange traded funds to commence trading on Tuesday, 23 July 2024. The decision ends months of speculation that began in May, when the regulator signalled a reversal of its earlier stance.
Analysts project that the new vehicles will attract between one fifth and one quarter of the capital that flowed into spot bitcoin ETFs during the first half of 2024. Ether traded 2.6 % higher at 05:45 Eastern Time on Tuesday – according to composite pricing data.
The funds cleared for launch are
21Shares Core Ethereum ETF (CETH) Bitwise Ethereum ETF (ETHW) Fidelity Ethereum Fund (FETH) Franklin Ethereum Trust (EZET) Invesco Galaxy Ethereum ETF (QETH) iShares Ethereum Trust ETF (ETHA) VanEck Ethereum ETF (ETHV) Grayscale Ethereum Trust (ETHE) Grayscale Ethereum Mini Trust (ETH)
Each issuer filed an effective prospectus with the regulator before the opening bell – satisfying the last procedural requirement.
Spot bitcoin ETFs that debuted in January have channelled more than fifty billion dollars into bitcoin since their launch. Matt Hougan, Chief Investment Officer at Bitwise, estimates that spot ether ETFs will pull in fifteen billion dollars of net new assets within eighteen months. He argues that the additional demand could push ether past its previous record of five thousand dollars.
The Ethereum network secures itself through staking, a process that differs from the proof-of-work mechanism used by Bitcoin. Token holders lock ether with validators who propose and attest to blocks. In return, the holders receive rewards that currently yield roughly three to four percent a year.
The legal treatment of staked ether remains unsettled. The Commodity Futures Trading Commission classifies both bitcoin and ether as commodities. The Securities besides Exchange Commission has not issued a formal designation for ether itself, yet the agency has repeatedly suggested that staking arrangements could constitute securities offerings. In April the regulator sued Consensys – alleging that the company sold unregistered securities through its MetaMask Staking service.
Because of that uncertainty, every spot ether ETF approved for trading will hold plain ether and will not stake any portion of the assets. The omission deprives investors of the yield that direct holders of the token receive.
SEC Commissioner Hester Peirce told Coinage that product features such as staking remain open for future reconsideration.
