TL;DR

The SEC has given preliminary approval to three asset managers for Ethereum ETFs.
The ETFs are expected to begin trading on July 23.
BlackRock, VanEck and Franklin Templeton are among those approved.

The US Securities and Exchange Commission (SEC) has granted preliminary approval to three of eight asset managers looking to launch exchange-traded funds (ETFs) tied to the spot price of Ethereum.

This preliminary approval, which still depends on the submission of final offering documents before the end of this week, could allow the ETFs to begin trading as early as July 23, according to industry sources.

BlackRock, VanEck and Franklin Templeton are among the asset managers likely to receive the final green light from the SEC on Monday, July 22, with the expectation that the products will begin trading the following day.

This move represents a significant step forward for the cryptocurrency industry in its effort to integrate digital assets into mainstream financial markets.

Ethereum, the world’s second-largest cryptocurrency after Bitcoin, is at the center of this movement.

The value of Ethereum has shown a significant increase in anticipation of the launch of these ETFs.

Over the past 24 hours, the price of Ethereum has risen by 7.1% to $3,433.07, up 14.4% over the past week.

This renewed interest in Ethereum follows the successful launch of nine Bitcoin spot ETFs in January, which attracted $6.6 billion in assets during their first three weeks of trading.

As of the end of June, these ETFs had accumulated a net total of $33.1 billion in inflows, according to data from Morningstar Direct.

Expectations and Repercussions of the Ethereum ETF Launch

Despite high expectations, some analysts suggest that inflows into new Ethereum ETFs could be more modest and that volatility in Ethereum’s price could be higher due to its smaller market size and trading volumes compared to Bitcoin.

Martin Leinweber, digital asset product strategist at MarketVector Indexes, stressed the need to moderate expectations due to these market differences.

The launch of the Ethereum ETFs follows a period of low expectations among industry executives, who were initially skeptical that the SEC would approve the products after less-than-encouraging meetings with officials.

However, the agency surprised the industry in May by approving the rule changes needed to allow stock exchanges to list these products, paving the way for their launch.

SEC Chairman Gary Gensler mentioned that the court’s decision in the Grayscale case had influenced his stance on approving Ethereum ETFs, due to similarities in the circumstances of the underlying market.

This influence was a key factor in the passage of the necessary rule changes.

Thomas Perfumo, head of strategy at cryptocurrency exchange Kraken, noted that given Ethereum’s smaller market size, inflows as large as those for Bitcoin ETFs are not needed to consider Ethereum ETFs a success.

According to estimates by Galaxy Research, Ethereum ETFs could attract monthly inflows of $1 billion.

This launch will mark another important milestone in the integration of cryptocurrencies into the mainstream financial market, reflecting the continued growth and acceptance of digital assets.

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Filed under: News - @ July 16, 2024 12:25 pm