Summary
- The first Ethereum Spot ETFs in the United States debuted today
- Experts predict $1 billion monthly inflows, or $5.4 billion in the first six months
- BlackRock calls Ethereum “global platform for applications”
The first Ethereum spot exchange traded funds (ETFs) in the United States debuted this morning at 9:30 am EST, signaling another win for the crypto industry. Of the nine ETFs, five started trading on Cboe, one on the NASDAQ, and three on the New York Stock Exchange (NYSE).
The ETFs come from a who’s-who in the traditional finance world: BlackRock, VanEck, Franklin Templeton, Fidelity, Grayscale, Invesco, 21Shares, and Bitwise. Most of the ETFs range in post-waiver fees of 0.19% to 0.25%, with the notable exceptions being the two Grayscale Ethereum Trusts; one has a fee of 0.15% and the other 2.5%.
Jay Jacobs, U.S. Head of Thematic and Active ETFs at BlackRock, said in a statement posted to X, “While many see bitcoin’s key appeal in its scarcity…many find [Ethereum´s] appeal in its utility.” Jacobs added that you could see Ethereum as a “global platform for applications” that can run without “decentralized intermediaries.”
Experts have predicted that Ethereum ETFs will receive around $1 billion monthly inflows. A week ago, Citigroup wrote in a report that the inflow could reach between $4.7 and $5.4 billion within the first six months. The exchange traded funds will be a good test to see if the general public has an appetite for crypto financial instruments outside of bitcoin.
Despite the launch of the ETFs, the market has retraced in the past day, falling 1.8%. At this time of writing, the price of ether has fallen 1.3% in the past 24 hours, resting around $3,400.
Will Ethereum ETFs perform as well as the Bitcoin ETFs?
The Ethereum ETFs debut half a year after the launch of the Bitcoin ETFs, leading to price speculation for the underlying ether coin. After the Bitcoin ETFs started trading, the price of bitcoin rose steadily to a top mark of $73,000. Overall, $17.6 billion has flowed into those exchange traded funds, with $534 million entering yesterday alone.
Will the Ethereum ETFs perform just as well? For many experts, that’s a question mark. Ether has the second-largest market capitalization of all cryptos, but it is behind bitcoin by a considerable margin. Altogether, the market capitalization for ether is 31.5% of bitcoin’s ($411 billion to $1.3 trillion) and bitcoin’s imprint on the public consciousness is likely higher as well.
Ethereum has some headwinds as well. Since the Dencun upgrade, which slashed network fees, the amount of ether being burned is much less. According to some statistics groups, ether has become an inflationary coin, with more ether being produced than burned, which may make some lay-investors more nervous than investing in bitcoin.
But there’s no doubt that today marks another win for the cryptocurrency industry. The tokenization of the world is real, and more traditional finance organizations are perceiving the change, especially as nation-state currencies continue to suffer from rampant inflation and debasement.
Here’s to another victory.
In case you missed it: