Key Takeaways
- Spot Ethereum ETFs are on track to launch on July 23, 2024.
- Grayscale plans to launch a separate mini ETH ETF with 0.25% fees alongside its main fund, which will have fees of 2.5%.
- Analysts expect Ethereum’s price to exceed $5,000 in the months that follow their launch.
U.S. spot Ethereum (ETH) exchange-traded funds (ETFs) are preparing to launch as they file their amended S-1 application forms.
With a view to launch on Tuesday, July 23, and a 10-day streak of positive inflows into spot Bitcoin (BTC) ETFs this past week, market sentiment is beginning to look extremely bullish.
Ethereum ETFs Ready
Today’s deadline to finalize Ethereum ETF applications has seen several funds submit their amended S-1 filings this week. This includes BlackRock, Grayscale, Fidelity, Invesco Galaxy, and Bitwise.
As per the S-1 filings, five Ethereum ETFs will offer starting fees of 0%, which will then peak at 0.25% after fee waiver periods lasting between six to 18 months.
The addition of spot ETH ETF tickers on Bloomberg’s trading terminal suggests that the ETH funds are on track for a July 23 launch.
Grayscale’s ETF Fees
When Grayscale converts its existing Ethereum Trust (ETHE) to a spot ETF, it will carry over approximately $10 billion in assets into the new fund. Unfortunately for investors, it, too, will carry the same 2.5% management fee. This is believed to be the driver behind GBTC’s enormous outflows of $18.71 billion.
Interestingly, Grayscale has a strategy in mind. Alongside ETHE’s conversion, it’s also planning to launch a separate spot ETH ETF, a mini fund, which will have 0.25% fees and be seeded with 10% of ETHE’s assets.
With plans to also launch a mini GBTC fund, Grayscale appears to be very aware that its 2.5% fee can’t compete with a majority of other funds. Notably, BlackRock’s IBIT, which offers fees of 0.25% and has garnered over $20 billion in net inflows since launching.
Ethereum ETF Staking
For now, it has been confirmed that spot Ethereum ETFs in the U.S. will not allow for staking. But pro-crypto SEC Commissioner Hester Peirce has noted that the inclusion of staking is “always open for reconsideration.”
Citing potential risks, the SEC is concerned with crypto staking, specifically as it pertains to the control and security of said assets when they are staked with a third party, e.g. an exchange or network.
Because of Ethereum’s shift to proof-of-stake (PoS), regulators have been investigating whether or not staking ETH constitutes an investment contract.
Under the Howey Test, staking ETH appears to meet the criteria, though the test fails to acknowledge the decentralized nature of Ethereum.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
