US approves 1st Ether ETFs

Regulators have approved the first US ETFs investing directly in Ether, the world’s second-largest cryptocurrency. Issuers including 21Shares AG, Bitwise Asset Management Inc., BlackRock Inc., Invesco Ltd., Franklin Templeton, Fidelity Investments, and VanEck received approval from the SEC. This move indicates an easing in US regulatory attitudes towards digital assets.

Jay Jacobs of BlackRock noted growing client interest in ETPs for digital assets, citing their access, liquidity, and transparency. The approval follows the SEC’s recent shift towards spot-Ether ETFs after initially permitting Bitcoin funds. Issuers are temporarily waiving fees on Ether ETFs to attract investors.

While Bitcoin ETFs have seen $17 billion in inflows since January, Ether ETFs are expected to have modest subscriptions. Analysts project annualised inflows of $4.8 billion to $6.4 billion for Ether, though actual demand might be between $3.2 billion and $4 billion.

Bitcoin’s success is partly due to its Digital Gold image, while Ether lacks this narrative and will not offer staking rewards, which can be earned directly by holding Ether. The SEC views Bitcoin as a commodity but is still debating Ether’s classification. As of Tuesday morning in Singapore, Bitcoin was at $67,530 and Ether at $3,475.

Additionally, VanEck and 21Shares have filed for a new ETF investing in Solana, aiming to capitalize on digital asset demand.

Attribution: Bloomberg