Fidelity, VanEck, 21Shares, Grayscale Update S-1 Filings As Ethereum ETF Trading Looms

Asset management firm VanEck has taken a significant step by filing an S-1 registration form with the US Securities and Exchange Commission (SEC) for a spot Ethereum exchange-traded fund (ETF). This move aims to launch the first spot Ethereum ETF in the United States. The proposed ETF, which would trade under the ticker symbol “ETHV” on the Cboe BZX Exchange, seeks to mirror Ethereum’s price performance, minus any expenses.

VanEck’s Proposal for Spot Ethereum ETF

The VanEck fund plans to hold actual Ethereum and base its share value on the MarketVector Ethereum Benchmark Rate. This rate is derived from prices on top Ethereum trading platforms. Notably, the ETF will not engage in Ethereum staking or yield-generating activities. Initially, it will allow only cash creations and redemptions by authorized participants. The SEC’s approval is still pending, as concerns around market manipulation and investor protection have previously prevented the approval of spot crypto ETFs.

Growing Confidence for Approval

Confidence is growing for the approval of spot Ethereum ETFs by July 18, following updates to S-1 forms by major issuers, including BlackRock. This optimism has positively impacted the market, with Ethereum’s price rising over 5% in the last 24 hours. This development comes after the SEC’s earlier approval of the 19b-4 forms, which are necessary for ETFs to start trading. Approval of a spot Ethereum ETF is seen as a significant milestone for the crypto market, potentially increasing institutional investment, demand, and liquidity for Ethereum.

Grayscale’s Announcement

Grayscale has also announced the launch of its Ethereum spot ETF, set to begin trading on July 18, 2024, under the ticker “ETHE” on NYSE Arca, pending regulatory approval. This follows Grayscale’s success in forcing the SEC to approve a Bitcoin spot ETF through legal action. The Ethereum spot ETF’s approval could set a precedent for other issuers, though success is contingent on meeting regulatory requirements and market conditions. The announcement led to a 2.75% surge in the trade price of Ethereum.

What This Means for Investors

The potential approval of spot Ethereum ETFs by the SEC could mark a significant turning point for the cryptocurrency market. It would provide a regulated and accessible way for institutional and retail investors to gain exposure to Ethereum. This could lead to increased demand and liquidity for Ethereum, further solidifying its position in the financial markets.