The SEC approved the spot Ethereum filings this week, with trading set to start on 23 July.
Some issuers include Blackrock, grayscale, 21 Shares, Fidelity, Bitwise, VanEck and Franklin Templeton.
Kaiko believes that Ethereum will be more sensitive to ETF inflows within the first few months of trading.
Wintermute sees the ETF inflows falling between $3.2 billion and $4 billion in their first year (compared to the $32 billion expected from Bitcoin’s ETFs
On the other hand, ASXN says the Ethereum ETFs are set to see monthly inflows between $800 million and $1.2 billion within the year.
The US Securities and Exchange Commission finally approved the S-1 filings for the spot Ethereum ETFs, with applicants including BlackRock, Fidelity, and Grayscale set to launch and begin offering these ETPs to investors on 23 July.
This marks one of the most significant milestones for the crypto industry since similar ETFs were approved for Bitcoin in January earlier this year.
These ETFs are set to bring billions of dollars into the Ethereum ecosystem this year alone, and the internet is swimming with speculation.
Let's review some of the most prominent ideas about what might be happening with Ethereum from here and why some analysts believe this is a massive "sell the news" event.
In May this year, the SEC approved the initial 19b-4 applications from several firms.
However, the final approval of these filings came this week, paving the way for these ETFs to begin trading on exchanges like the Nasdaq, New York Stock Exchange, and Chicago Board Options Exchange.
So far, the leading issuers include Blackrock's iShares Ethereum Trust (NASDAQ), Grayscale's Ethereum Trust (NYSE), along with others like Fidelity, 21Shares, Bitwise, Franklin Templeton, VanEck, and Invesco Galaxy.
These ETFs will offer base fees ranging from 0.15% to 0.25%. Some issuers, including Fidelity, 21Shares, Bitwise, Franklin Templeton, and VanEck, will waive fees until their ETFs hit a certain net asset threshold.
On the other hand, the Grayscale Ethereum Mini Trust will waive its fees for the first six months or until its AUM reaches $2 billion.
The Ethereum ETF approvals have not been without speculation.
Kaiko, for example, released a new report that predicts that the price of Ethereum will be "sensitive" to ETF inflows for the first few weeks/months after listing.
Ethereum’s price before and after approval
Furthermore, the firm also pointed out the correlation between the current launch and the “underwhelming” demand for Ethereum Futures products in late 2023.
This makes sense, considering how the cryptocurrency saw a period of massive volatility before and after the launch of the Bitcoin ETFs.
On the other hand, Ethereum's price action has been relatively stagnant so far. It even trades at a mere 1% daily, only hours after the ETF approvals.
Going even further, while Wintermute sees the Ethereum ETFs taking in between $3.2 billion and $4 billion worth of inflows in their first year (compared to the $32 billion expected from Bitcoin's ETFs), it also sees Ethereum's price rising by a meagre 24% by the end of 2024.
This puts Ethereum at only slightly above $4,500, assuming a current price of $3,500.
On the other (more bullish) hand, according to crypto asset firm ASXN, the Ethereum ETFs are set to see monthly inflows between $800 million and $1.2 billion within the year.
Overall, while Ethereum may be reacting more sluggishly than expected to the news about the ETFs, it still has a massive amount of potential in terms of investor interest and inflows.
Moreover, the Ethereum ETH approvals mean that the SEC no longer considers Ethereum security and that we can now see ETFs for several other cryptocurrencies, including Solana, XRP and Cardano.
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