Digital asset manager Grayscale has announced that its two spot Ether exchange-traded funds (ETFs) have begun trading on the NYSE Arca.
This marks a significant “milestone” for investors and the broader ETF market.
The launch followed the United States Securities and Exchange Commission (SEC) granting final approval for spot Ether ETFs, paving the way for various issuers to start trading their products.
Bloomberg analyst James Seyffart noted on July 22 that while the Grayscale Ethereum Trust (ETHE) hadn’t yet received official SEC documents, they were expected by the morning of the first trading day.
ETHE, currently the world’s largest Ether-based exchange-traded product, holds $9.19 billion worth of ETH and charges a 2.5% management fee.
Grayscale’s second product, the Grayscale Ethereum Mini Trust (ETH), will not charge fees for the first six months or until it manages $2 billion in net assets.
After meeting either condition, a 0.15% fee will be applied, making it the most affordable spot Ether ETF in the U.S.
“ETH and ETHE will allow investors to invest in Ethereum’s potential to create markets, transform financial systems, utilize decentralized finance (DeFi), and drive innovation through the trusted ETP wrapper — without the need to buy, store, or manage Ethereum directly,” Grayscale’s managing director John Hoffman stated to Cointelegraph.
READ MORE: NYSE Arca Approves Listing of Grayscale and Bitwise Spot Ether ETFs, Awaiting SEC Authorization
In addition to Grayscale, Ether ETFs from BlackRock, Fidelity, 21Shares, Bitwise, Franklin Templeton, VanEck, and Invesco Galaxy also received approval to start trading on July 23.
In preparation for the launch, Grayscale transferred over $1 billion worth of ETH to Coinbase on July 22.
The transfer involved 292,263 Ether, aligning with Grayscale’s plan to move this amount from ETHE to its Ethereum Mini Trust, as outlined in a July 18 filing.
This move is expected to ease potential outflows from Grayscale, according to Seyffart, who commented on X on July 17. Existing ETHE holders will receive the new Ether-backed product at a 1:1 ratio, avoiding capital gains tax.
Bloomberg analysts Seyffart and Eric Balchunas predict that the new spot Ether ETFs could attract 10% to 20% of the inflows seen by spot Bitcoin ETFs since their launch.
However, Matt Hougan, Bitwise’s chief investment officer, believes spot Ether ETFs might have a more substantial impact on Ether’s price than spot Bitcoin ETFs had on Bitcoin.
He anticipates Ether’s price could surpass $5,000 before the end of 2024.
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