The U.S. Securities and Exchange Commission has given the green light for exchange-traded funds that hold ether, the world’s second-largest cryptocurrency. Trading for these ETFs is expected to begin as early as Tuesday, marking a significant moment for the cryptocurrency market.
Several fund issuers submitted additional registration statements on Monday afternoon, signaling that the SEC has approved the funds. The regulator’s decision to allow exchanges to list ether funds back in May paved the way for this development. Companies like BlackRock, Fidelity, and VanEck, along with crypto-focused firms like Bitwise, 21Shares, and Grayscale, are all gearing up to launch ether ETFs.
While the launch of bitcoin ETFs earlier this year saw great success, with more than $16 billion in net inflows, the ether ETFs are not predicted to reach the same level of popularity. This is due in part to the fact that the total market for ether is smaller than that of bitcoin. However, industry experts still anticipate that the ether funds will be sizable by ETF standards.
Bitwise Chief Investment Officer, Matt Hougan, has projected that the ether funds could attract $15 billion within their first year and a half on the market. He believes that many investors will be interested in holding both bitcoin and ether funds to gain exposure to different aspects of the blockchain technology.
While there are already funds on the market that utilize ether futures contracts, these new ETFs will be the first in the U.S. to directly buy and hold spot ether. This distinction sets them apart and may appeal to investors looking for a more direct way to invest in cryptocurrencies.
The approval of ether ETFs by the SEC represents a significant milestone for the cryptocurrency market. With major players in the industry getting ready to launch these funds, investors have a new opportunity to diversify their portfolios and gain exposure to the growing world of cryptocurrencies.