Ethereum Spot ETF Officially Log in to the US Securities Market

On July 23, 2024, the U.S. Securities and Exchange Commission approved multiple Ethereum Spot ETFs to be listed and traded on the U.S. securities market, marking a new milestone for Ethereum digital assets. At 9:30 AM (Eastern Time), a total of 9 Ethereum Spot ETFs officially began trading on different exchanges.

These ETFs are distributed across three major exchanges:

1. The CBOE exchange has listed 5 ETFs, including products from 21Shares, Fidelity, Franklin, Invesco Galaxy, and VanEck.

2. The Nasdaq Stock Exchange listed BlackRock's iShares Ethereum Trust.

3. The NYSE Arca electronic trading platform has listed ETF products from Grayscale, ProShares, and Bitwise.

In addition, Grayscale's existing Ethereum Trust has also been approved to convert to a Spot ETF.

In the first trading day, within about 2 hours, the total trading volume of these ETFs reached approximately $434 million. Among them, the Grayscale Ethereum Trust performed the best, with an inflow of $177.2 million. In contrast, the 21Shares Core Ethereum ETF had the lowest trading volume, at only $4.69 million.

According to reports, ETF analyst Eric Balchunas pointed out that the trading volume of the Ethereum Spot ETF reached $112 million just 15 minutes after trading began. Although this figure is quite substantial compared to ordinary ETF issuances, it is only about half of the trading volume of the Bitcoin Spot ETF on its first day.

There are significant differences in pricing among the various ETFs. The VanEck Ethereum ETF has the highest opening price at $50.06, while the Grayscale Ethereum Mini Trust has the lowest opening price at just $3.26, making it the largest Ethereum Spot ETF by trading volume at present. The average price of other ETFs generally falls between $20 and $30.

Despite active ETF trading, the price of Ethereum itself has responded relatively flat. As of July 24th, midnight (Singapore time), ETH has only increased by 0.46%, with a market value of approximately $3455.2.

These newly launched ETFs are similar in basic structure, initiated by asset management companies, with qualified custodians holding the actual ETH, and relying on professional market makers to create and redeem shares. However, there are some differences in fees, most of which are around 0.25%, with some offering short-term incentives. Notably, Grayscale's fee is significantly higher than the others, reaching 2.5%.

Regarding the issue of ETH staking, it has been reported that although some institutions attempted to include staking in an ETF, the U.S. Securities and Exchange Commission ultimately rejected this proposal. The main reason may be the time required to withdraw ETH from the beacon chain, which does not align with the quick redemption requirements of ETFs.

Industry insiders generally believe that the launch of the Ethereum Spot ETF marks a new development stage for blockchain digital assets. Kyle DaCruz, head of digital assets at VanEck, stated that if Bitcoin is seen as digital gold, then Ethereum is a marketplace for open-source applications, providing users with an entry point to access numerous blockchain applications.

Research institution Steno Research predicts that Ethereum Spot ETF may attract between $15 billion and $20 billion in capital inflows in its first year, a scale comparable to Bitcoin Spot ETF's performance in seven months. This forecast reflects the market's high expectations for the Ethereum ETF, while also suggesting that digital asset investment tools are gradually moving towards mainstream financial markets.