A representation of Ethereum using its native cryptocurrency, Ether.
Dado Ruvic | Reuters
The U.S. Securities and Exchange Commission appears to have given the green light to exchange-traded funds (ETFs). etherthe world’s second-largest cryptocurrency, is expected to begin trading as early as Tuesday.
Several fund issuers filed supplemental registration statements Monday afternoon, and exchanges advised that the funds would trade on Tuesday, indicating that the SEC had approved the funds.
The regulator did not immediately respond to CNBC’s request for comment on Monday. The agency approved rule changes in May to allow exchanges to list ethereum funds.
Among the firms that have been racing to launch Ethereum funds are large asset managers such as BlackRock, Fidelity and VanEck, along with crypto-focused firms such as Bitwise, 21Shares and Grayscale (which is essentially converting its multi-billion-dollar Ethereum trust into two ETFs with different fee levels).
The Ethereum ETF arrives about six months after the launch of the Bitcoin ETF, which had the most successful debut in the industry’s history. Together, these funds have attracted more than $16 billion in net inflows, according to FactSet, led by the iShares Bitcoin Trust (IBIT).
Ethereum funds are not expected to be as popular as bitcoin funds, in part because Ethereum’s market cap is only roughly a quarter of that of the major cryptocurrencies.
Still, the fund is expected to be large by the standards of most ETF launches: Bitwise Chief Investment Officer Matt Hogan predicts the fund will raise $15 billion in its first year and a half on the market, with many investors holding both bitcoin and ethereum funds.
“If you think about an investor who doesn’t have any particular view and just wants exposure to the potential of blockchain, their starting point will be exposure to both bitcoin and ethereum,” Hogan said.
While there are already several funds on the market that use Ethereum futures contracts, these new funds will be the first to buy and hold spot Ethereum in the United States.
