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ETH Spot ETF Launch: When, Where Will Ethereum Fund Be Available?

Last Updated 3 days ago
Giuseppe Ciccomascolo
Last Updated 3 days ago

Key Takeaways

  • Last month, the US Securities and Exchange Commission (SEC) approved ETFs based on Ethereum.
  • Investing in ETFs is less risky than directly holding cryptocurrencies.
  • However, it is still uncertain when they will be available to investors.

After the US Securities and Exchange Commission (SEC) approved exchange-traded funds (ETFs) based on Ethereum (ETH) in May, US investors began to anticipate when these investment opportunities would become available.

Although the SEC has not yet announced a specific launch date, saying it may happen “this summer”, potential investors should understand ETH ETFs, how they work, and where they will be available before making any investments.

How to Buy ETH ETF

ETFs are a good option for investors who think about Ethereum but are hesitant to dive into directly buying cryptocurrency. To invest in this kind of asset, first, traders must find a reputable brokerage firm that allows ETF trading.

Then, users should open an account by providing identification and depositing funds for the investments. After that, users need to research and select the Ethereum ETF that aligns with their investment goals. Finally, thy can purchase shares of the chosen ETF just like if they’re buying stocks.

Understanding Ethereum ETFs is crucial. There are two main types: spot ETFs, which hold actual Ethereum and mirror its price movements; and futures ETFs, which track the price of Ethereum using futures contracts, offering exposure without directly holding the asset.

Ethereum ETFs may represent a convenient and potentially cost-effective way to invest in Ethereum. They simplify the investment process by bypassing the complexities of cryptocurrency wallets and exchanges. Purchasing ETFs may also incur lower fees compared to directly buying cryptocurrency. However, the investment value will reflect the rise and fall of Ethereum’s price.

While traders are waiting for Ethereum ETFs to be available in the US, some of them already trade on global exchanges, including the 21Shares Ethereum ETF  and the 3iQ CoinShares Ether Feeder ETF , which are available in Australia. Others are available in Hong Kong.

Ethereum Fund Details

Ethereum funds are private investment vehicles providing institutional-quality exposure to Ether. They cater to institutional investors seeking exposure to Ethereum through traditional investment vehicles. The funds hold ETH directly, mirroring its price movements. They offer simplified management by outsourcing trading, operations, finance, and secure custody of Ethereum assets.

The investment strategy focuses on holding ETH, allowing investors to participate in Ethereum’s price performance while minimizing administrative burdens. ETH funds are offered by institutional managers who can also provide institutional-grade security for crypto assets.

Hypothetical $10,000 investment
The line graph represents the cumulative performance of a hypothetical $10,000 investment. l Source: Bitwise

The funds aim to simplify the complexities of investing in digital assets by offering investors outsourced trading, operations, finance, and custody/digital asset private key protection services. This makes buying and holding ETH easier, as institutional managers offering these investments have access to professional trading solutions, custody partners, and reputable service providers.

The fund’s principal investment strategy is to invest in Ethereum. This enables investors to gain exposure to ETH’s price movements through a traditional investment vehicle while seeking to minimize administrative costs. A top-tier crypto asset custodian safeguards the funds’ ETH.

ETH ETF Launch Details in Full

Last month, the SEC approved applications from Nasdaq, CBOE, and NYSE to list spot ETH ETFs. This was a surprising win for the cryptocurrency industry, which had expected rejections after discouraging meetings with the regulator.

However, the timing for when these ETFs can begin trading largely depends on how quickly issuers respond to the SEC’s queries, according  to chair Gary Gensler. The regulator’s chairman informed  US senators that final approvals for ETFs trading Ethereum are anticipated to be completed this summer.

However, when questioned by the Senate, Gensler avoided clearly classifying Ethereum as either a security or a commodity. He sidestepped the issue, stating that the agency had only “partially” approved Ethereum ETFs without offering further clarification.

During a Senate Appropriations Committee subcommittee hearing, SEC Chair Gary Gensler said that the approval process for Ethereum ETFs was progressing “smoothly,” following the initial approval of a batch of such ETFs. He mentioned that the final registration requirements, known as S-1 filings, are currently being handled at the “staff level” within the SEC.

Nevertheless, when directly asked whether ETH should be considered a commodity, Gensler refrained from providing a definitive answer, maintaining the SEC’s ambiguous stance on the asset’s classification. In contrast, Commodity Futures Trading Commission (CFTC) Chief, Rostin Behnam, during the same hearing, responded affirmatively to the same question, stating, “Yes.”

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