[Ethereum ETF is officially launched, analysis of potential capital inflows and impact on Ethereum price, how much ETH is in the issuing company’s wallet? 】
Following the success of the Bitcoin ETF, a spot Ethereum ETF went live on a U.S. exchange today, marking a new milestone in cryptocurrency investing. A total of nine ETF products are launched this time, issued by companies such as BlackRock, Fidelity, Grayscale, and VanEck, and traded on Cboe, NYSE Arca or Nasdaq exchanges.
Grayscale launches Ethereum Trust (ETHE) and Mini Ethereum Trust (ETH) with fees of 2.5% and 0.15% respectively. With initial assets of approximately $1 billion, the Mini Ethereum Trust is the cheapest Ethereum fund on the U.S. market. The SEC approved the proposal two months ago, paving the way for the ETF to go public.
Citi estimates the ETFs could attract $4.7 billion to $5.4 billion in inflows in the first six months, which, while smaller than Bitcoin ETFs, shows interest in ethereum. Data from Arkham shows that these issuing companies hold large amounts of Ethereum and can influence the market.
Coinbase serves as custodian for eight of the nine newly approved Ethereum ETFs. Tom Duff Gordon, Coinbase’s vice president of international policy, said this milestone validates the place of cryptocurrencies in the mainstream economy.
The market expects smaller inflows for the Ethereum ETF compared to the Bitcoin ETF which attracted $17.6 billion in inflows since January this year. This is partly because these funds do not stake their Ethereum holdings. Matt Hougan, chief investment officer at Bitwise, said that although the ETF’s pre-open trading volume was lower than the Bitcoin ETF’s launch day, trading activity from major players was reassuring.
Framework Ventures co-founder Vance Spencer believes institutional investors will seek exposure to both Bitcoin and Ethereum, similar to tech investors buying FAANG stocks. He expects the listing of an Ethereum ETF to spark this trend.
In summary, after the listing of the Ethereum ETF, the market’s expectations for its capital inflow and price impact have gradually become clearer. While inflows may not be as high as Bitcoin ETFs, Ethereum’s utility and market demand will have a positive impact on its price.
