Ethereum

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The United States Securities and Exchange Commission (SEC)&nbsp;<a style="text-decoration:none" href="https://www.sec.gov/files/rules/sro/nysearca/2024/34-100541.pdf">approved</a> the Grayscale Ethereum Mini Trust and the ProShares Ethereum ETF to list on the New York Stock Exchange’s Arca platform.
The SEC’s approval came through a Form 19b-4 filing, which enables NYSE Arca to initiate the trading of these funds. This filing is a critical step, but the issuers must still await final comments on the ETFs' respective S-1 filings before the products can officially commence listing.
<h2 dir="ltr" id="span-span-grayscale-ethereum-mini-trust-span-span">Grayscale Ethereum Mini Trust</h2>
Grayscale, a well-known crypto investment manager, is converting its legacy spot ETH fund, the Grayscale Ethereum Trust (ETHE), into an exchange-traded fund. The Grayscale Ethereum Mini Trust will launch alongside other Ethereum ETFs, seeding with 10% of ETHE’s assets.&nbsp;
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Bloomberg ETF analyst James Seyffart&nbsp;<a style="text-decoration:none" href="https://x.com/JSeyff/status/1813672656748810369">noted</a> that this strategic allocation aims to provide stability, cushioning against potential outflows as the product launches.
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 "The mini Ethereum ETF is set to launch simultaneously with the others. ETH will seed with 10% of ETHE’s assets essentially off the bat. This should help alleviate some of the likely Grayscale outflows," Seyffart said.
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Meanwhile, ProShares entered the Ethereum ETF scene slightly later but is part of a broader wave of similar products hitting the market. In total, eight spot Ethereum ETFs are poised for imminent listing, pending final SEC approval. Preliminary approval has been given to at least three issuers to begin listing spot Ether ETFs as soon as July 23.
<h2 dir="ltr" id="span-span-competitive-fees-span-span">Competitive Fees&nbsp;</h2>
The race to list Ethereum ETFs has led to a flurry of S-1 filings and amendments, with several asset management firms setting their proposed fees and waiver periods. BlackRock, for instance, has&nbsp;<a style="text-decoration:none" href="https://www.sec.gov/Archives/edgar/data/2000638/000143774924022935/iset20240710_s1a.htm">set the fee</a> for its spot Ethereum ETF at 0.25%, with a potential launch next week. Their fee structure includes a 0.12% fee for the first year or until the fund amasses $2.5 billion in net assets.
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Other firms have also proposed competitive fees. The Franklin Templeton-issued spot Ether ETF will charge the lowest fee at 0.19%, while the Bitwise and VanEck Ethereum ETFs are set at 0.20%. The 21Shares Core Ethereum ETF’s fee is 0.21%, and Fidelity and Invesco Galaxy will offer a 0.25% fee, similar to BlackRock.
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Several firms, including&nbsp;<a style="text-decoration:none" href="https://www.sec.gov/Archives/edgar/data/2013744/000199937124008735/bitwise-s1a_071124.htm">Bitwise</a>, Fidelity, Franklin Templeton,&nbsp;<a style="text-decoration:none" href="https://www.sec.gov/Archives/edgar/data/1860788/000093041324002024/c109048_s1a.htm">21Shares</a>, and VanEck, have proposed fee waivers to attract investors.&nbsp;
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VanEck, for example, will waive its fee for the first 12 months or after it amasses $1.5 billion in net assets, whichever comes first. Bitwise will waive its fee for the first six months or until it reaches $0.5 billion in net assets. Franklin Templeton has set a fee waiver until January 31, 2025, or until it gathers $10 billion in assets.
<h2 dir="ltr" id="span-span-market-impact-span-span">Market Impact</h2>
The introduction of spot Ether ETFs in the U.S. is expected to have a significant impact on the asset's price, potentially more so than Bitcoin ETFs did for BTC, According to Bitwise Chief Investment Officer Matt Hougan.
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Hougan highlighted three main reasons: Ethereum’s inflation rate is effectively zero due to widespread application usage, those staking ETH do not have significant direct costs compared to Bitcoin miners, and approximately one-third of all ETH (28%) is staked and thus effectively off the market.
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"Currently, 28% of all ETH is staked, meaning it is effectively off the market," Hougan said, emphasizing the potential for increased demand and reduced supply to drive up prices.

SEC Approves Grayscale and ProShares Ethereum ETFs for NYSE Arca Listing

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