Grayscale’s Spot Ether ETFs Make a Splash on NYSE
YEREVAN (CoinChapter.com) — Grayscale’s two spot Ether exchange-traded funds (ETFs) have officially started trading on the NYSE Arca. This marks a significant moment for both Grayscale and the broader ETF market. The approval came just one day after the United States Securities and Exchange Commission (SEC) gave the green light for these products. Grayscale’s managing director John Hoffman highlighted the importance of these ETFs in providing traditional investors with exposure to Ethereum.
ETHE and ETH Products Attract Investors with Varied Fee Structures
The Grayscale Ethereum Trust (ETHE) is now the world’s largest Ether-based exchange-traded product, boasting $9.19 billion in ETH holdings. ETHE will charge investors a 2.5% management fee. This product is attracting significant interest from investors looking to gain exposure to Ethereum without managing the cryptocurrency directly. Bloomberg analyst James Seyffart mentioned that ETHE had not yet received official effective documents from the SEC but expected them on the morning trading commenced.
Grayscale ETF Approval Delay. Source: James Seyffart
Grayscale’s second product, the Grayscale Ethereum Mini Trust (ETH), offers a different fee structure. For the first six months or until it reaches $2 billion in net assets under management, the product will waive its fees. Once either threshold is met, a 0.15% fee will apply, making it the cheapest spot Ether ETF in the US. This approach aims to attract investors by minimizing initial costs.
Major Financial Players Join Grayscale in Launching Spot ETH ETFs
Alongside Grayscale, other major financial players like BlackRock, Fidelity, 21Shares, Bitwise, Franklin Templeton, VanEck, and Invesco Galaxy have also received approval to launch their spot Ether ETFs. These approvals collectively signal a growing acceptance and interest in Ethereum-based financial products. These ETFs allow investors to tap into Ethereum’s potential to create markets, transform financial systems, and utilize decentralized finance (DeFi) without directly managing the cryptocurrency.
Grayscale Transfers $1B ETH to Coinbase to Ease Outflows
In preparation for the ETF launches, Grayscale transferred over $1 billion worth of Ether to Coinbase on July 22. This transfer, amounting to 292,263 ETH, aligns with a July 18 filing in which the firm detailed its plans.
Grayscale’s ETH transfers to Coinbase Custody on July 22. Source: Arkham Intelligence
This move is expected to ease potential outflows from Grayscale’s products, as noted by Seyffart.
Grayscale’s Mini Ethereum ETF Launch Insight. Source: James Seyffart ETHE Holders to Get 1:1 New Ether Product; Analysts Predict Significant ETF Flows
Existing ETHE holders will receive the new Ether-backed product at a 1:1 ratio, avoiding capital gains tax events. Analysts like Seyffart and Eric Balchunas predict the spot Ether ETFs to gather 10% to 20% of the flows seen by spot Bitcoin ETFs since their launch. However, Bitwise’s chief investment officer, Matt Hougan, believes the impact on Ether’s price could be more significant than that of Bitcoin’s ETFs.
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