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SEC gives green light to spot Ethereum ETFs
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SEC gives green light to spot Ethereum ETFs

On Monday, July 22, the US Securities and Exchange Commission (SEC) took a historic step by approving the first spot ETFs for Ethereum. Now, the world's second-largest cryptocurrency is set to have its time in the sun.
This decision follows the launch of Bitcoin ETFs in January 2024. Currently, the SEC has approved the first spot ETFs for Ethereum. This is a significant event for cryptocurrency supporters and investors. It is expected that this move will speed up the integration of virtual currencies into the traditional financial system and open additional opportunities for market participants.
Experts estimate that this revolutionary decision applies to the conversion of Grayscale Investments' $9.3 billion trust, as well as the launch of new tools by BlackRock and Fidelity, which manage Bitcoin exchange-traded funds.
Ethereum (ETH) is the native cryptocurrency of the Ethereum blockchain network and the second-largest cryptocurrency asset with a market capitalization of $415 billion. In 2023, the SEC approved the launch of futures ETFs for Ethereum, but crypto enthusiasts believe that the new spot tools will help the second digital asset establish itself in the traditional US. financial system.
In this situation, just like with Bitcoin, ETF issuers for Ethereum are trying to attract investors with low fees. The final costs for most of these products will be below 0.25%, with at least five issuers ready to waive fees for a while.
However, not all companies supported the waiver of commission fees. Grayscale Investments will keep a 2.5% management fee for its Ethereum ETF obtained through conversion. At the same time, the company is ready to create a mini version with 10% of the larger ETF's assets. It is expected that after the grace period, this firm will have the lowest fee of 0.15%.
Earlier, Grayscale also retained the management fee for its Bitcoin ETF at 1.5%. This decision brought Grayscale $160 million in Bitcoin ETF commission income in 2024. According to Morningstar research, this is the third-largest figure among all ETFs in the US.
Nevertheless, analysts doubt that the new cryptocurrency product will attract as many assets as the Bitcoin ETF. Remember, since the launch of Bitcoin ETFs, investors have poured over $17 billion into these funds.
Despite the Ethereum blockchain network having much broader functionality than Bitcoin, investors find it challenging to understand these differences. Moreover, unlike ETH, BTC has long been known as "digital gold."
Previously, some analysts suggested that in the first 18 months, spot Ethereum ETFs could attract around $15 billion. However, it is difficult to predict how events will unfold, as the cash flow into new funds is unpredictable.
Published 26 July 2024
© InstaFintech Group
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