Ether ETFs Trading: What Should You Know

Following the much-awaited approval of Spot Bitcoin ETFs back in January, Ether, the world’s second-largest cryptocurrency, entered the spot ETF market this week on Monday, 22 July, after the U.S. Securities and Exchange Commission’s (SEC) final approval, and is expected to start trading on Tuesday, 23 July. 

So what are the Ether ETFs, and what does this cryptocurrency milestone mean? Let’s find out:

What Do Spot Ether ETFs Mean & Why Are They Important?

Spot Ether ETFs are investment vehicles that mirror Ethereum prices, similar to stocks on exchanges that track Ether's price movements. Consequently, the value of Ether ETFs fluctuates in tandem with current Ether prices. 

Spot Ether ETFs enhance accessibility to the cryptocurrency market, exposing traders and investors to Ethereum prices without owning the underlying cryptocurrency. 

Furthermore, they represent a significant regulatory development, reflecting the SEC's commitment to safeguarding traders, promoting market transparency, and curbing fraudulent activities. This regulatory step may contribute to Ethereum's and the broader cryptocurrency market's perception as “legitimatised” investments. According to the co-founder and president of 21Shares, Ophelia Snyder, this “approval represents further proof that crypto as an asset class is here to stay.”

Nonetheless, it is essential to note that this type of ETF is usually more volatile than others, given cryptocurrencies’ volatile nature. It can also experience tracking errors and be under more regulatory scrutiny.

Which Ether ETFs Did the SEC Approve?

Spot Ether ETFs got the SEC’s approval on 23 May 2024, and here are the following Ether ETFs that are expected to be available for trading today, Tuesday, 23 July:

• Fidelity Ethereum Fund (FETH)

• Bitwise Ethereum ETF (ETHW)

• 21Shares Core Ethereum ETF (CETH)

• Invesco Galaxy Ethereum ETF (QETH)

• iShares Ethereum Trust ETF (ETHA)

• VanEck Ethereum ETF (ETHV)

• Franklin Ethereum Trust (EZET)

What Do Experts Think of This Crypto Event?

While this event may be much-awaited for many market watchers and despite the fact that spot Bitcoin ETFs “brought in billions of dollars,” some analysts believe that it may be met with underwhelming demand. 

For example, the president of The ETF Store, Nate Geraci, said, “We'll see about a third of the demand of what we've seen from spot bitcoin ETFs.” Bloomberg analyst Eric Balchunas revealed similar expectations. 

Notably, the SEC’s approval did not shift Ethereum prices “significantly.” Still, only time will reveal the actual implications of this event. 

How Do Politics Affect the Cryptocurrency Market?

Traders and investors may want to note that the U.S. Republican nominee, Donald Trump, who once said that cryptocurrencies are a “scam,” recently stated that they are “amazing” and is also expected to speak about cryptocurrencies this week at the Bitcoin 2024 conference (the world’s biggest Bitcoin conference) from July 25th to 27th, potentially offering his “stamp of approval” on them. While Trump’s actual comments are yet to be unveiled, many expect this to be “a historic message”, according to the event’s organiser and that Trump is expected to “deliver a supportive speech.” 

In general, some believe that "it's more likely that a Trump administration would be more friendly to crypto than the Democrats have been.” This, in turn, contrasts with the Biden administration which led a “crackdown on many of the industry’s major players following a market meltdown in 2022.” (Source: Yahoo Finance)

Conclusion

In conclusion, the approval of Spot Ether ETFs represents a significant milestone for Ethereum and the cryptocurrency market. 

These ETFs offer investors and traders a way to engage with Ethereum's market dynamics without directly owning the cryptocurrency, enhancing accessibility and regulatory oversight. 

While initial demand is expected to differ from that of Bitcoin ETFs, their introduction might signify the growing legitimacy and maturation of cryptocurrencies as a recognised asset class in global finance. 

However, the cryptocurrency market remains volatile and has regulatory challenges, so traders and investors may want to wait and see what else lies in store for this market before making their decisions.