NEW YORK, July 22, 2024 – Several spot Ethereum exchange-traded funds (ETFs) have been given the green light to begin trading on Tuesday, following weeks of amendments to their registration statements.

The U.S. Securities and Exchange Commission (SEC) has approved registration forms from major players, including 21Shares, Bitwise, BlackRock, Fidelity, Franklin Templeton, VanEck, and Invesco Galaxy, as of Monday afternoon. Registration forms for the Grayscale Ethereum Trust and the Grayscale Ethereum Mini Trust have also been approved.

Ophelia Snyder, co-founder and president of 21Shares, expressed her excitement: "The launch of the 21Shares Core Ethereum ETF (CETH) marks a significant milestone for 21Shares and for U.S. investors. Today's approval represents further proof that crypto as an asset class is here to stay."

Firms aiming to launch their spot Ethereum ETFs received initial approval for their 19b-4 forms from the SEC in May. However, they still required their registration statements to go effective before launching. The recent approvals were unexpected due to minimal prior engagement between the SEC and issuers. However, in the week leading up to the deadlines, the SEC began notifying exchanges of its impending approvals.

Cynthia Lo Bessette, head of Digital Asset Management at Fidelity, highlighted the advantages of their new offering: "Our spot Ethereum ETF will allow investors to gain exposure to ether through thoughtful index and product design supported by a dedicated operations and trading team and industry-leading security. This exemplifies Fidelity's rich history and commitment to meeting the evolving needs of our customers."

Earlier this year, spot bitcoin ETFs were approved and have since attracted billions of dollars in investments. According to senior Bloomberg ETF analyst Eric Balchunas, Ethereum ETFs may attract 10 to 15% of the assets that bitcoin products received, potentially reaching $5 to $8 billion in the first few years.

Nate Geraci, president of The ETF Store, added context during an event hosted by The Block: "The current spot ether market is less than a third of the size of the bitcoin market. I think we'll see about a third of the demand of what we've seen from spot bitcoin ETFs."

Following the approval of spot bitcoin ETFs, exchanges have considered offering trading options on these products but have yet to receive regulatory approval. Options contracts allow investors to buy or sell at an agreed-upon price on a specified date.

Next on the horizon, firms may look to include staking in their spot Ethereum ETF products. While initial proposals for Ethereum ETFs included staking components, these were removed due to SEC concerns. However, Bloomberg ETF Analyst James Seyffart believes it’s a matter of time before staking is approved, stating, "It's just figuring out what that when is."

Variant Chief Legal Officer Jake Chervinsky echoed this sentiment in a recent post, saying, "There's no good reason why the SEC should prevent ETH ETFs from staking. Staked ETH isn't a security, and investors can fully understand the risk of a staked product and decide for themselves if they want to take that risk. It'll take a while, but this is 'when,' not 'if.'"

The approval of spot Ethereum ETFs represents a significant step forward for the cryptocurrency market, providing investors with new opportunities to gain exposure to digital assets through regulated financial products.