Ethereum Spot ETF Officially Log In to the US Securities Market

On July 23, 2024, nine Ether Spot ETFs officially began trading on the U.S. securities market, marking an important milestone in the development of Ethereum digital assets. These ETFs are distributed across different exchanges:

• The CBOE Exchange has listed five ETFs, including products from 21Shares, Fidelity, Franklin, Invesco Galaxy, and VanEck.
• The Nasdaq Stock Exchange has listed BlackRock's iShares Ethereum Trust.
• The NYSE Arca electronic trading platform has listed ETF products from Grayscale, ProShares, and Bitwise.

In addition, the U.S. Securities and Exchange Commission has also approved Grayscale to convert its existing Ethereum Trust into a Spot ETF.

On the first trading day, the total transaction volume of these ETFs reached 434 million dollars within about 2 hours. Among them, the Grayscale Ethereum Trust had the highest transaction volume at 177.2 million dollars, while the 21Shares Core Ethereum ETF had the lowest transaction volume at 4.69 million dollars.

Analysts pointed out that the trading volume of these ETFs reached $112 million just 15 minutes after the market opened. Although this figure is quite substantial compared to ordinary ETF issuances, it is only about half of the trading volume of the Bitcoin Spot ETF on its first day.

The opening price differences among the ETFs are significant, with the VanEck Ethereum ETF having the highest opening price of $50.06, while the Grayscale Ethereum Mini Trust has the lowest opening price at only $3.26. The average price of other ETFs ranges between $20 and $30.

Despite the start of ETF trading, the price performance of Ethereum (ETH) itself has been relatively flat. As of midnight Singapore time on July 24, the daily increase of ETH was only 0.46%, with a price of approximately $3455.2.

These newly launched Ethereum spot ETFs are structurally similar, initiated by asset management companies, held by qualified custodians with actual ETH, and rely on professional market makers to create and redeem shares. The main difference lies in the fee structure, with most ETFs having a base fee of around 0.2%-0.25%, while some ETFs also offer short-term fee discounts. It is worth noting that Grayscale's fee is relatively high at 2.5%.

Regarding the ETH staking issue, currently these ETFs do not participate in staking. According to reports, some ETF issuers have attempted to obtain regulatory approval for staking but were denied. This may be related to the fact that extracting ETH from the beacon chain takes a long time, while ETFs need to ensure timely redemptions.

Industry insiders believe that the launch of the Ethereum Spot ETF marks a new development stage for blockchain digital assets. Some analysts predict that these ETFs may attract between $15 billion and $20 billion in capital inflow in the first year, a scale comparable to the performance of Bitcoin Spot ETF in 7 months.