After months of anticipation, Ethereum spot ETFs have finally arrived.
On July 23, SEC filings and exchange announcements confirmed that eight applicant institutions received approval for Ethereum spot ETFs. Nine ETFs will begin trading on three major U.S. exchanges at 9:30 AM ET (21:30 Beijing time).
Unlike Bitcoin's straightforward path, Ethereum's ETF journey faced hesitation, dashed hopes, a dramatic reversal, and lingering uncertainty—culminating in a celebratory outcome. This marks a new milestone for the crypto world, sparking renewed bullish sentiment.
Key Developments
- Initial Applications: The race began in September 2023 when VanEck and 21Shares & ARK filed the first Ethereum spot ETF applications. Grayscale, Invesco & Galaxy, and Fidelity followed, with BlackRock’s entry fueling market excitement.
- Regulatory Hurdles: After Bitcoin ETF approvals, Ethereum’s prospects brightened, but SEC scrutiny over Ethereum’s regulatory status dampened confidence. A political shift in May revived hopes, leading to critical 19b-4 approvals on May 24.
- Final Approval: The lengthy S-1 review concluded on July 23, with nine ETFs greenlit for trading.
Fee Wars and Competitive Landscape
Fee structures emerged as a battleground, with most issuers adopting aggressive discounts:
| Issuer | Fee Rate | Waiver Terms |
|---------------------|-------------|------------------------------------------|
| Grayscale (Mini ETH)| 0.15% | First 6 months/$2B AUM free |
| Franklin Templeton | 0.19% | $10B AUM free until Jan 2025 |
| VanEck | 0.20% | First $1.5B AUM free until 2025 |
| BlackRock | 0.25% | First year/$2.5B AUM at 0.12% |
Grayscale’s mini ETH trust surprised with the lowest fee (0.15%), aiming to retain market share. Meanwhile, Franklin Templeton undercut rivals at 0.19%.
Brand Power Over Fees: Despite fee competition, issuer reputation dominates inflows. BlackRock’s Bitcoin ETF attracted $18B in six months (0.25% fee), while Franklin’s lower-fee product drew just $345M.
Market Implications
- Global Pressure: U.S. ETFs’ low fees (vs. Hong Kong’s 0.3%+) may drive capital回流 (reflow) from other regions.
- Coinbase Dominance: Seven issuers chose Coinbase as custodian, bolstering its revenue—though ETF trading may challenge its transaction fees.
- No Staking: All approved ETFs exclude staking, reducing appeal for yield-seeking investors but avoiding dilution of ETH’s market share.
Potential Challenges
- Grayscale’s Sell-Off Risk: ETHE’s $11B AUM could face outflows mirroring GBTC’s $20B exit post-Bitcoin ETF approval. Grayscale moved $1B ETH to Coinbase, hinting at prep for sales.
- Short-Term Pressure: Analysts expect ETH price volatility but believe other ETFs will absorb most outflows.
Broader Significance
Ethereum’s ETF approval:
- Legitimizes Crypto: Expands investor access and solidifies ETH as a regulated asset.
- Regulatory Precedent: SEC’s non-security classification for ETH and staking sets a benchmark for other tokens.
- Ecosystem Boost: ETH’s rise may spill over into DeFi and Layer 2 projects, extending the crypto bull run.
FAQs
Q: When do Ethereum ETFs start trading?
A: July 23, 9:30 AM ET on CBOE, NYSE, and Nasdaq.
Q: Which ETF has the lowest fee?
A: Grayscale’s mini ETH trust (0.15%) and Franklin Templeton (0.19%).
Q: Can these ETFs stake ETH?
A: No—all issuers removed staking from final filings.
👉 Track real-time ETF performance here
Market Watch: At press time, BTC traded at $67,380 and ETH at $3,474.97, with muted pre-launch volatility.
This approval—rooted in political shifts—carries risks but underscores crypto’s rising influence. For now, both parties vie for crypto voters, ensuring the sector remains a policy priority.
👉 Explore ETH trading strategies
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