Ethereum Spot ETF officially launched for trading on the U.S. securities market

On July 23, 2024, the U.S. Securities and Exchange Commission approved the trading application for the Ethereum Spot ETF, marking an important milestone in the development of Ethereum digital assets. At 9:30 AM that day, a total of 9 Ethereum Spot ETF products began trading on various exchanges in the United States.

These ETF products are distributed across three major exchanges:

1. CBOE Exchange has listed 5 ETFs:

   • 21Shares Core Ethereum ETF (CETH)
   • Fidelity Ethereum Fund (FETH)
   • Franklin Ethereum ETF (EZET)
   • Invesco Galaxy Ethereum ETF (QETH)
   • VanEck Ethereum ETF (ETHV)

2. The Nasdaq Stock Exchange listed 1 ETF:

   • BlackRock's iShares Ethereum Trust (ETHA)

3. The New York Stock Exchange Arca electronic trading platform listed 3 ETFs:

   • Grayscale Ethereum Mini Trust (ETH)
   • ProShares Ethereum ETF (EETH)
   • Bitwise Ethereum ETF (ETHW)

In addition, regulators have also approved Grayscale to convert its existing Ethereum Trust (ETHE) into a Spot ETF.

In the first two hours of trading, the total trading volume of these ETF products reached approximately $434 million. Among them, Grayscale Ethereum Trust performed the best, attracting $177.2 million in fund inflows. In contrast, the trading volume of 21Shares Core Ethereum ETF was the lowest, at only $4.69 million.

According to Bloomberg ETF analyst Eric Balchunas, the total trading volume of the Ethereum Spot ETF reached $112 million just 15 minutes after trading began. While this figure is quite substantial compared to regular ETF issuances, it is still only about half of the trading volume of the Bitcoin Spot ETF on its first day.

In terms of pricing, the VanEck Ethereum ETF opened at a leading price of $50.06, while the Grayscale Ethereum Mini Trust had the lowest opening price at just $3.26. Most other ETF products opened between $20 and $30.

Despite the active performance of ETF products, the market performance of Ethereum (ETH) itself has been relatively calm. As of 00:00 Singapore time on July 24, 2024, the daily increase of ETH was only 0.46%, with the price maintained around 3455.2 USD.

These newly launched Ethereum Spot ETFs have some differences in their fee structures. Most products maintain a base fee of around 0.25%, with some institutions offering free periods or preferential policies. For example, the Fidelity Ethereum Fund waives management fees for the entire year of 2024, and the Franklin Ethereum ETF exempts fees on the first $10 billion of assets until January 31, 2025. Notably, Grayscale's fee is set at 2.5%, significantly higher than other competitors.

Regarding whether ETH held in ETFs can participate in staking, currently all ETF products do not participate. According to reports, some institutions have attempted to apply for staking to be included in ETF operations, but they were rejected by regulators. This decision is partly due to the fact that extracting staked ETH from the Ethereum network may take several days, which does not align with the requirement for timely redemption of ETFs.

Industry insiders generally believe that the launch of the Ethereum Spot ETF marks a new development stage for blockchain digital assets. Bitwise Chief Investment Officer Matt Hougan stated that investors can now access major digital assets that make up about 70% of the market through low-cost ETFs. VanEck's Head of Digital Assets Kyle DaCruz likened Ethereum to an open-source app store, considering it an important gateway connecting numerous blockchain technology applications.

Research institution Steno Research predicts that the Ethereum Spot ETF could attract between $15 billion and $20 billion in inflows in its first year, a scale comparable to the performance of the Bitcoin Spot ETF within 7 months. With the launch of these ETF products, the Ethereum ecosystem is expected to see broader participation from institutional and retail investors.