Grayscale Launches Two Spot Ether ETFs on NYSE Arca Following SEC Approval

Grayscale Launches Two Spot Ether ETFs on NYSE Arca Following SEC Approval

Grayscale, a prominent digital asset manager, has announced that its two spot Ether exchange-traded funds (ETFs) have officially begun trading on the NYSE Arca, marking a significant milestone for both its investors and the broader ETF market.

This launch follows the final approval of spot Ether ETFs by the United States Securities and Exchange Commission (SEC) just a day earlier, allowing several issuers to commence trading their products. On July 22, Bloomberg analyst James Seyffart noted in a post on X that while the Grayscale Ethereum Trust (ETHE) had not yet received official effective documents from the SEC, these were anticipated to arrive on the morning trading began.

Currently, ETHE is the world’s largest Ether-based exchange-traded product, holding $9.19 billion worth of ETH. It will charge a 2.5% management fee to investors.

Grayscale’s second offering, the Grayscale Ethereum Mini Trust (ETH), will waive fees for the first six months or until it reaches $2 billion in net assets under management. Once either of these conditions is met, a 0.15% fee will be instituted, making it the most affordable spot Ether ETF available in the US.

John Hoffman, Grayscale’s managing director, emphasized in a statement to Cointelegraph that “ETH and ETHE will enable investors to tap into Ethereum’s potential to revolutionize markets, transform financial systems, leverage decentralized finance (DeFi), and drive innovation through a reliable ETP wrapper — all without the need to directly buy, store, or manage Ethereum.”

Additionally, Ether ETFs from BlackRock, Fidelity, 21Shares, Bitwise, Franklin Templeton, VanEck, and Invesco Galaxy were approved to start trading on Tuesday, July 23.

In preparation for the ETF launch, Grayscale transferred over $1 billion worth of ETH to Coinbase on Monday, July 22. The transfer consisted of 292,263 Ether, valued at approximately $1.01 billion, matching the amount Grayscale had indicated it would move from ETHE to its Ethereum Mini Trust in a July 18 filing.

Seyffart mentioned in a July 17 post on X that this move “should help alleviate some of the likely Grayscale outflows.”

Existing ETHE holders will receive the new Ether-backed product at a 1:1 ratio, avoiding a capital gains tax event.

Seyffart and fellow Bloomberg ETF analyst Eric Balchunas project that the spot Ether ETFs will capture between 10% to 20% of the flows that spot Bitcoin ETFs have attracted since their launch just over six months ago.

However, Matt Hougan, Bitwise’s chief investment officer, believes that the spot Ether ETFs could have a more substantial impact on Ether’s price than the spot Bitcoin ETFs have had on Bitcoin. Hougan forecasts that Ether’s price will surpass its current all-time high and exceed $5,000 by the end of 2024.