After successfully navigating regulatory hurdles and making multiple amended registration filings, spot Ether (ETH) exchange-traded funds (ETFs) are finally poised for launch. The debut of publicly-traded Ethereum (ETH) ETF shares is a watershed moment, as they will be listed alongside major companies such as Apple Inc (AAPL) and the SPDR S&P Trust (SPY) on leading brokerage platforms in the United States.
This much-anticipated development signifies a significant milestone for cryptocurrency markets, providing a new investment avenue for millions of US institutional and retail investors. Below are key details to help investors capitalize on this opportunity.
Spot Ether ETF Availability
The Chicago Board Options Exchange (CBOE) has set July 23 as the launch date for five ETH ETFs to be traded on its platform: 21Shares Core Ethereum ETF, Fidelity Ethereum Fund, Invesco Galaxy Ethereum ETF, VanEck Ethereum ETF, and Franklin Ethereum ETF. It is anticipated that an additional four spot ETH ETFs will be traded on either Nasdaq or the New York Stock Exchange (NYSE) Arca, with plans for a simultaneous listing on July 23.
Where to Purchase Ethereum ETF Shares
Ethereum ETF shares will be available for purchase on leading brokerage platforms. These ETFs have received regulatory approval to trade on major U.S. exchanges such as Nasdaq, the New York Stock Exchange (NYSE) Arca, and Cboe BZX. While direct trading occurs on these exchanges, investors typically utilize intermediary brokerage platforms like Fidelity, E*TRADE, Robinhood, Charles Schwab, and TD Ameritrade.
Choice of ETF and Considerations
Nine spot Ether ETFs are earmarked for trading, each sharing almost identical underlying mechanics. These ETFs are sponsored by reputable fund managers, backed by spot ETH custodians, and rely on professional market-makers for share creation and redemption. They offer standard investor protections, including insurance against brokerage failures and cybersecurity risks.
One key differentiating factor is the management fees. The management fees for eight of the ETFs range from 0.15% to 0.25%, with the exception of the Grayscale Ethereum Trust (ETHE), which retains a management fee of 2.5%.
Notably, most Ethereum ETFs are currently waiving or discounting fees to attract investors. The Grayscale Ethereum Trust and the Invesco Galaxy Ethereum ETF stand out as exceptions in this regard. The Grayscale Ethereum Mini Trust leads in terms of fees, offering an attractive management fee of 0.15% initially waived for the first six months after listing or until the fund reaches $2 billion in assets under management (AUM).
Another cost-effective option is the Franklin Templeton’s Franklin Ethereum ETF (EZET), which boasts management fees of 0.19%, fully waived through January 2025 or until the fund surpasses $10 billion in assets under management (AUM).
Ethereum ETFs and Staking
Although Ethereum ETFs do not currently facilitate staking, attempts were made earlier this year by issuers such as Fidelity, BlackRock, and Franklin Templeton to secure regulatory approval for staking in spot ETH ETFs. However, these requests were denied by the SEC. The primary concern cited is liquidity, as staked ETH entails extended withdrawal timelines from the Beacon Chain, posing redemption challenges for ETF shares.
While issuers are exploring potential solutions, incorporating staking into the existing pool of spot ETH ETFs is projected to take several months at the earliest. As things stand, staking does not feature as an option for Ether ETFs.
