Will these 8 Ethereum ETFs be approved on July 2?

Earlier this month, Bloomberg ETF analyst Eric Balchunas tweeted that based on his reporting, he believed the agency would approve Ethereum ETFs for trading on July 2. Several of Balchunas’ predictions on this topic have already come true.

Balchunas correctly predicted the approval of Bitcoin ETFs in January, as well as several events leading up to the approval of an ETH ETF, lending credibility to his tweets. [0].

What is an Ethereum Spot ETF?

Ethereum has many features that set it apart from Bitcoin. It is blockchain does not only host Ether coins; it is also the home of decentralized applications And non-fungible tokens which run on the Ethereum protocol. Ethereum also now uses a proof of stake system for creating new parts – a more energy-efficient system than the proof of work process behind Bitcoin Mining. (Ethereum also used a proof-of-work system until it switched to proof-of-stake in 2022.)

There are already Ethereum strategy ETFs on the market, which indirectly track the price of Ether using in the long term contracts. However, these may not track the price of the cryptocurrency as accurately as a spot Ethereum ETF would, and they may charge higher fees. If Ethereum spot ETFs are approved on July 2, they would be the first of their kind.

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How many Ethereum ETFs could be approved?

To date, eight different ETF issuers have filed registration statements with the SEC for Ethereum ETFs.

They are listed below, along with the expected name and ticker symbol of each ETF, each ETF’s fees, and any promotional fee waivers, if that information is available. (Some issuers file registration statements with blank spaces where the ETF’s fees should be stated.)

Source: SEC EDGAR system. Data is current as of June 24, 2024 and is provided for informational purposes only.

In the days leading up to the first Bitcoin ETF approvals in January 2024, Bitcoin ETF issuers engaged in a race to the bottom on fees. Many issuers filed multiple amended registration statements lowering their fees in an attempt to undercut their competitors, some of whom responded hours later by filing their own amended registration statements with even lower fees.

Others announced last-minute promotions, such as cutting their fees to zero for the first six months of trading, in an effort to distinguish themselves as the cheapest Bitcoin ETF. This rapid exchange of fee cuts and promotions continued in the hours before the SEC’s approval was announced.

Investors could see a similar rapid price war between potential Ethereum ETF issuers in the coming days. With that in mind, it’s worth double-checking any information you find online about Ethereum ETF fees and promotions. Any numbers you see online could be outdated by the time you read them.

Ethereum ETF Strategy

We define an Ethereum strategy ETF as any ETF that invests at least 50% of its assets in Ethereum futures contracts. There are seven such funds on the market today, and they are listed below from lowest to highest fee amount.

Sources: Fund websites. Data is current as of June 25, 2024 and is provided for informational purposes only.

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What Would ETF Approvals Mean for Ethereum?

The price of Ethereum is up approximately 44% this year at the time of writing. Would ETF approvals add to this momentum? That remains to be seen.

Ethereum ETFs would offer 401(k) and IRA investors a new way to invest in cryptocurrencies. Americans collectively hold nearly $40 trillion in retirement accounts, and many of these accounts do not allow trading in cryptocurrencies themselves.

In the three months since Bitcoin ETFs were approved, the price of Bitcoin has actually increased – by more than 50%, in fact. But it’s hard to say whether this is entirely due to ETF-related purchases.

There is another potential explanation for the Bitcoin rally in early 2024: the media hype that led to the Bitcoin Halving in April. And whatever the primary cause of that rally, it didn’t last long. Bitcoin has fallen more than 10% in the past three months.

Ethereum ETF versus Ethereum itself

Spot Ethereum ETFs could have some advantages over other ways to invest in Ethereum. As we discussed, they could offer investors who cannot purchase Ethereum directly (such as investors in retirement accounts) a cheaper and more reliable way to invest in Ethereum than the existing range of Ethereum Strategy ETF.

However, it is important to note that Ethereum ETFs have some disadvantages compared to owning the cryptocurrency itself. Ethereum ETF investors would not receive staking rewards (a kind of interest payment or dividend for Ether holders).

If you want to benefit from this feature of Ethereum, you will need to invest in the cryptocurrency itself.

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