Ethereum ETFs go live on Tuesday
New spot ETFs for Ethereum—which will let investors purchase the second most popular cryptocurrency in the form of stocks— are expected to begin trading on Tuesday, July 23. The Securities and Exchange Commission has green lit at least three funds to enter the market that day.
What is a spot Ether ETF?
Ether is the native cryptocurrency of the Ethereum blockchain. Despite the SEC’s reservations, Ether is legally considered to be a commodity, but the corresponding ETFs will be securities.
ETFs first came to market in 1993. The funds pool together a basket of securities, such as a handful of different energy stocks, and the price aligns with the indexes that it tracks. They are listed on exchanges & can be traded during market hours, thus operating like stocks.
Spot Ether ETFs will track the spot—or current—price of Ether. The products give investors access to the underlying crypto without the need to own a crypto wallet. The ETFs will be set up as grantor trusts, meaning investors will own a share of the Ether held by the trust.
Who issues them & what are the fees?
Eight asset managers are proposing to offer Ethereum ETFs: BlackRock, Ark Invest/21Shares, VanEck, Grayscale, Fidelity, Bitwise, Franklin Templeton and Invesco/Galaxy Digital. Each instrument will be near-identical, so the fees charged to investors are competitive. For now, we know that Franklin Templeton will charge 0.19%, VanEck at 0.20% & Invesco and Galaxy Digital will charge a 0.25% fee for its jointly filed ETF.
The full list of fees will be revealed when the final registration statements, or S-1s, are submitted to the SEC. This will be on Tuesday, if trading begins for all eight.
Where can I access them?
They will be listed on the Nasdaq, Chicago Board Options Exchange (CBOE) and New York Stock Exchange.
