Spot Ethereum exchange-traded funds (ETFs) began trading in the U.S. for the first time on July 23, 2024, as asset managers obtained permission to issue the funds.
Each fund invests in the cryptocurrency Ethereum (ETH) and is divided into and sold as shares. This approach allows investors to gain exposure to the price of ETH without holding ETH in a wallet or puchasing it via a crypto exchange.
The list of approved funds includes:
- VanEck Ethereum Trust (ETHV) on Cboe
- 21Shares Core Ethereum ETF (CETH) on Cboe
- Invesco Galaxy Ethereum ETF (QETH) on Cboe
- Fidelity Ethereum Fund (FETH) on Cboe
- Franklin Ethereum Trust (EZET) on Cboe
- BlackRock’s iShares Ethereum Trust ETF (ETHA) on Nasdaq
- Bitwise Ethereum ETF (ETHW) on NYSE Arca
- Grayscale Ethereum Trust (ETHE) on NYSE Arca
- Grayscale Mini Ethereum Trust (ETH) on NYSE Arca
Earlier, on May 23, the SEC granted approval to rule changes that allow exchanges to list and trade the funds. However, the May decision did not grant ETF issuers the ability to issue the funds and provided no launch date for the funds.
While some investors now have access to the spot ETH ETFs, it is still unclear which retail brokerages will list the funds for trading.
$1 Billion In First-Day Volumes
Bloomberg reported that spot Ethereum ETFs saw trading volumes above $1 billion on the first day of trading. BlackRock’s ETHA saw $248 million in first-day trading volume. Bitwise’s ETHW saw $94 million in trading volume, while Grayscale’s Ethereum Trust saw about $458 million in trading volume.
By contrast, spot Bitcoin ETFs collectively saw $4.6 billion in trading volume on their first day of trading in January of this year.
The long-term performance of spot Ethereum ETFs will be also judged based on inflows. Bloomberg cited algorithmic trading firm Wintermute, which said that other estimates place the funds’ one-year inflows between $4.8 and $6.4 billion. However, Wintermute itself expects the funds to see just $3.2 to $4 billion in flows.
One factor that will impact spot ETH ETF flows is the fact that Grayscale converted its ETF from an existing fund with closde redemptions. In a comment to The Block, Hashkey Capital partner Jupiter Zheng said Grayscale’s spot ETH ETF will likely see outflows just as its spot Bitcoin ETF did. Outflows could weigh down on prices, The Block reported.
Hashkey Capital nevertheless believes the funds will impact ETH’s price positively in the long term. According to Zheng, the firm believes ETH could be worth $6,000 to $10,000 by the end of the year. ETH was priced at $3,452 at the time of writing.
