Exchange-traded funds (ETFs) holding ether (ETH) officially started to trade in the United States on Jul 23, 2024, following the final approval from regulators on Monday. This puts the world’s second-largest cryptocurrency in an investment vehicle favored by many professional investors and advisors.
Major Financial Firms Launch Ether ETFs
The Securities and Exchange Commission (SEC) has granted approval to BlackRock BLK, Fidelity, Franklin Templeton, Grayscale, and 21 Shares, as announced by the companies. The move positions ether, the world’s second-largest cryptocurrency, as a potential inclusion in 401(k)s, IRAs, and pension plans, enhancing its mainstream acceptance. The approvals come about six months after the SEC allowed many of these same money managers to launch ETFs holding bitcoin (BTC), the world’s largest cryptocurrency.
Crypto Industry's Regulatory Success
This development points to the recent success that the crypto industry has achieved in terms of regulation. This also increases the chances of more favorable regulation and introduction of new products. It comes just days before the speech of Donald Trump, the Republican nominee for president, at the Bitcoin 2024 conference in Nashville, where he is expected to offer his support.
Political Support for Cryptocurrencies
Trump and many Republicans have embraced digital assets, contrasting with the Biden administration's crackdown on major industry players following a market meltdown in 2022. The GOP's 16-page party platform stated, "Republicans will end Democrats’ unlawful and unAmerican Crypto crackdown." Trump, who previously referred to Bitcoin as a "scam," called cryptocurrencies "amazing" in a recent Bloomberg interview.
Bitcoin and Ether Price Trends
Bitcoin's price has risen over 9% in the past month to around $65,000. Ether has increased by more than 3% over the past month and is up 53.8% in the past six months. The trading of ether ETFs signifies wider public acceptance of digital assets by prominent Wall Street figures.
Can BlackRock Replicate Bitcoin’s Success in Ether?
BlackRock received approval in January to issue a spot Bitcoin ETF. Its iShares bitcoin ETF IBIT experienced $18 billion in net inflows in its first six months. On Monday, BlackRock announced that its registration statement for the iShares Ethereum Trust ETF (ETHA) had been declared effective by the SEC.
ETFs in Focus
New ether ETFs include Grayscale Ethereum Mini Trust (ETH) (charges 15 bps in fees), Franklin Ethereum ETF (EZET) (charges 19 bps in fees), Vaneck Ethereum ETF (ETHV) (charges 20 bps in fees), Bitwise Ethereum Fund (ETHW) (charges 20 bps in fees), 21Shares Core Ethereum ETF (CETH) (charges 21 bps in fees), Fidelity Ethereum Fund (FETH) (charges 25 bps in fees), Invesco Galaxy Ethereum ETF (QETH) (charges 25 bps in fees), iShares Ethereum Trust (ETHA) (charges 25 bps in fees) and Grayscale Ethereum Trust (ETHE) (expense ratio is 2.50%).
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