Applications for exchange-traded funds (ETFs) to spot Ethereum, or more specifically, Ether, were authorized on May 23 by the US Securities and Exchange Commission (SEC). This is in addition to the January approval of Bitcoin spot ETFs, which was a notable and unexpected move in the world of cryptocurrency assets. Now you know everything there is to know about Spot Ether ETF.

What does the Approval mean?

SEC approval of Ether ETFs greatly increases the number of people who can access Ethereum, a cryptocurrency, especially institutional investors such as businesses, insurance companies, pension funds, etc. While these organizations have held Ether directly in the past, the introduction of ETFs offers many conveniences. The financial products of Exchange Traded Funds (ETFs) are well known to investors. They know their risks, are comfortable with their structure, etc. As these ETFs are now available, the size of the potential market for Ether will increase significantly.

Which ETFs were Approved?

Eight ETFs in all were approved, including:

1.Grayscale Ethereum Trust

2.Bitwise Ethereum ETF

3.Blackrock’s iShares Ethereum Trust

4.VanEck Ethereum Trust

5.ARK 21Shares Ethereum ETF

6.Invesco Galaxy Ethereum ETF

7.Fidelity Ethereum Fund

8.Franklin Ethereum ETF

The approval process we observed is similar to the Bitcoin ETF application process, with each application being accepted at the same time.

Why is this Approval so Surprising?

Aside from Bitcoin, the SEC has historically been quite cautious about cryptocurrencies and are often referred to as securities. A few weeks ago, it was unlikely that Ether ETFs would be approved. Leading analysts such as Eric Balchunas and James Seyffart have recently revised their approval probability estimates from 25% to 75%. This incredibly sudden and short turnaround, brought about by the SEC and applicants after months of silence on further negotiations, raises the possibility of political interference.

How much volume is expected for Ether ETFs?

Of course, estimating volume, or assets under control, is difficult. While spot ETFs for Bitcoin broke many records, it is unlikely that Ether ETFs will achieve similar numbers. Bitcoin remains the most popular cryptocurrency in terms of market capitalization and investor interest, among other metrics. Analysts Balchunas and Seyffart estimate that ether ETFs could potentially take up 10-20% of the assets under management seen in Bitcoin ETFs.

When will ETF start Trading?

Unlike the quick launch of Bitcoin ETFs, Ether ETFs are expected to take some time to start trading. A few more approvals are still required for the so-called S-1 forms, but they are only formalities. Trading may begin in the coming weeks.

Conclusion

It is conceivable that other nations will begin to allow Ether ETFs, following the example of the US and paralleling the movement with Bitcoin ETFs. The next cryptocurrency asset to receive an ETF is currently the subject of much speculation. On sites like X, discussions about Solana ETFs have begun. While I don't expect to see another cryptocurrency asset ETF this year, the way politics is moving in favor of a pro-crypto environment could surprise.