Fidelity has filed one of the final form, 8-A12B, for the ethereum spot ETF on Monday, indicating trading may begin potentially as soon as this week.
The form says “an application for listing of the Shares of the Trust has been filed with and approved by Cboe BZX Exchange, Inc.”
When a similar form was filed for the bitcoin spot ETFs, trading began just days later as almost nothing else was left, except for the revelation of management fees.
Fidelity also filed an amended prospectus with almost no changes save for cosmetic modifications, making it unclear why they really went through the exercise at all.
One potential reason may well be shown from the BlackRock amended S1 prospectus where an entire paragraph has been removed, which said:
“In August 2021, the chair of the SEC stated that he believed investors using digital asset trading platforms are not adequately protected, and that activities on the platforms can implicate the securities laws, commodities laws and banking laws, raising a number of issues related to protecting investors and consumers, guarding against illicit activity, and ensuring financial stability.
The chair expressed a need for the SEC to have additional authorities to prevent transactions, products, and platforms from ‘falling between regulatory cracks,’ as well as for more resources to protect investors in ‘this growing and volatile sector.’
The chair called for federal legislation centering on digital asset trading, lending, and DeFi platforms, seeking ‘additional plenary authority’ to write rules for digital asset trading and lending.”
The Securities and Exchanges Commission (SEC) chair Gary Gensler has now changed his mind and claims he has all the authority he needs, including for areas where in August 2021 he specifically stated Congressional authority was needed.
Hence SEC has clearly made BlackRock remove this factual paragraph, and in the process presumably asked all other issuers to file amendments as well.
Unless there’s some other comma missing, or SEC pettiness, this suggests the prospectuses are good to go and in their final state.
The other issuers however have not yet filed the 8-A12B form. So rather than this week, trading may start next week, and most of them are yet to reveal their fees, which will probably be a day or two before trading begins.
The ones that have revealed them illustrate the ethereum spot ETF annual management fees will be around the same level as for bitcoin, circa 0.2% a year.
The ETF eth holdings can not be staked for these issuers, with no reason given by the SEC for this arbitrary limitation. Once staking is allowed, probably in the next cycle, then the ETFs will pay the holders, making eth a dividend yielding growth asset.
For now though we’re just waiting for simple trading to start. As is tradition for eth, its debut happens to occur while crypto markets are a bit under pressure due to the MT Gox distribution and the German police liquidating some bitcoin.
The Gox coins have not yet been sent to Kraken, so any temporary delay to these ETFs is good news as they might do better one that Gox ‘trustee’ can be bothered to press send.
