Trading of the recently approved Ethereum ETFs is scheduled for July 23.
The expected Ethereum ETF debut has sparked tremendous bullish activity following nearly two months of delays.
Crypto analysts caution investors against buying Ethereum.
Ethereum’s price soared above $3,465 on Thursday, fueled by anticipation of imminent approval for several Ethereum exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC). The cryptocurrency has surged 25% in recent weeks, reflecting investor excitement for a potential watershed moment in mainstream adoption.
Industry sources claim that at least three of the eight asset managers preparing to introduce ETFs linked to Ethereum’s spot price have received preliminary approval from the SEC. These ETFs could begin trading as early as Tuesday, July 23, if final offering paperwork is filed by the end of this week.
However, cryptocurrency analyst @cryptobanter cautioned investors against buying ETH now. The analyst pointed out that ETF fees have been disclosed, ranging from approximately 0.12% to 1.25%, with the exception of Grayscale’s 2.5% fee. This means Grayscale’s fees are at least ten times higher than those of other providers. He stated that Grayscale’s motivation is clear, as they currently hold 2.96 million ETH, worth about $10 billion
$BTC's price action after the ETF launch… CAN WE EXPECT THE SAME FROM $ETH?Today I'm showing you why you should WAIT before buying $ETH and WHEN you should buy it…LIVE RIGHT NOWhttps://t.co/w5rw0mAM15 pic.twitter.com/cOTLSK9Iqy
— Ran Neuner (@cryptomanran) July 18, 2024
The analyst argued that Grayscale is employing the same high-fee strategy they used with the GBTC Bitcoin ETF. The challenge with this approach is that it could lead investors to sell their ETH holdings. Furthermore, the analyst stated that despite being extremely bullish on the ETH ETF, he agrees with most analysts: the 2.5% fee is simply too high and will likely result in an outflow of funds.
The launch of Ethereum ETFs has the potential to attract a broader range of investors and further legitimize digital assets. However, just as the debate over Grayscale’s high fees illustrates, the path to mainstream adoption has its own set of challenges.
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