The Chicago Board Options Exchange (CBOE) has revealed that five spot Ethereum exchange-traded funds (ETFs) will begin trading on July 23, pending final regulatory approval.
Approval and Upcoming Launch
The announcement follows the United States Securities and Exchange Commission (SEC) approving rule changes on May 23, allowing the listing of spot Ether ETFs. However, the launch is contingent upon the SEC’s final approval of each fund issuer’s respective S-1 registration statements.
The Five Ethereum ETFs Set to Trade
The five spot Ether ETFs set to commence trading are:
- 21Shares Core Ethereum ETF
- Fidelity Ethereum Fund
- Invesco Galaxy Ethereum ETF
- VanEck Ethereum ETF
- Franklin Ethereum ETF
To gain a competitive edge, most ETF issuers have announced plans to temporarily waive or discount fees, aiming to capture market share once trading begins.
Industry Predictions and Market Impact
Industry analysts predict that Ether ETFs could attract billions of dollars in net inflows in the months following their launch. The growing demand from institutional investors to include Ether in their portfolios could potentially lead to a supply crunch. Currently, the Ethereum Exchange Reserve, which tracks the amount of available Ether on cryptocurrency exchanges, is at multi-year lows.
A recent report by Kaiko highlighted Ether’s 1% market depth and suggested that lower liquidity could result in increased price volatility, potentially causing Ether to outperform Bitcoin in terms of percentage gains.
Predictions on Inflows and Price Impact
Institutional analyst Tom Dunleavy predicts that inflows into Ethereum ETFs could reach $10 billion this year, with monthly capital flows of up to $1 billion. He expressed optimism about the price impact, anticipating new all-time highs for Ether by early Q4.
Matt Hougan, Chief Investment Officer of Bitwise, noted that Ethereum stakers were less inclined to sell their assets compared to Bitcoin holders. He pointed out that 28% of Ether’s supply was already sequestered and that increased withdrawals from exchanges to cold storage indicated that Ether holders expected future price appreciation.
Political Influences on Approval
Bloomberg ETF analyst James Seyffart suggested that the approval of spot Ethereum ETFs was influenced by political decisions rather than purely financial considerations. In a recent interview, Seyffart mentioned that the political climate, including actions by the Biden administration and responses from the crypto community, played a significant role in the approval process.
Future Crypto ETFs: Solana’s Potential
Seyffart noted that without significant regulatory changes, the approval of other crypto ETFs, including those for Solana, is unlikely. He emphasized the need for a regulated market to monitor these assets for fraud and manipulation.
Contrastingly, crypto investor and trader Brian Kelly has suggested that Solana could potentially be the next cryptocurrency to have a spot ETF in the United States. In a recent episode of CNBC’s ‘Fast Money,’ Kelly, who is also the founder and CEO of the BKCM Digital Asset Fund, posed the question, “The trade now is, who’s next?” He suggested, “You’ve got to think about Solana as probably the next one. Bitcoin, Ethereum, and Solana are probably the big three for this cycle.”
Conclusion
The official launch of spot Ethereum ETFs on July 23 marks a significant milestone for the cryptocurrency market. With strong institutional interest and optimistic market predictions, the introduction of these ETFs is expected to have a profound impact on Ether’s market dynamics and future performance.
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