Spot Ethereum ETF Race Intensifies as Issuers Prepare for Imminent Launch

ETF issuers are making their final preparations to launch spot Ethereum-based products in the United States next week.

On July 18, ETF Store president Nate Geraci noted that the final S-1s were in from prospective spot ETH ETF issuers. The Form S-1 is the initial registration form for new securities required by the SEC for public companies.

Two months ago, “just about everyone thought these had no chance of approval,” he added before predicting that the launch date could be Tuesday, July 23.

Looks like *Final* S-1s now IN from prospective spot eth ETF issuers…

2mos ago, just about everyone thought these had no chance of approval.

Next step = launch (sounds like Tues)!

— Nate Geraci (@NateGeraci) July 17, 2024

ETH ETFs Gearing Up

On July 18, Bloomberg ETF analyst James Seffart summarized the offerings from the nine spot Ethereum ETFs that are expected to launch for trading next week. The interesting thing to observe is the fee structure, with the heavyweights BlackRock and Fidelity charging just 0.25% in fees for their yet-to-launch funds.

As an initial sweetener, BlackRock is issuing a reduction for the first 12 months or $2.5 billion gathered in assets for its iShares Ethereum Trust (ETHA). Fidelity stated it would waive fees for its FETH fund until the end of the year. Ark 21Shares and Bitwise are asking for 0.21% and 0.2%, respectively.

“Seven of the 10 ETFs launching are coming out with fee waivers, some waiving the fee completely anywhere from six months to 10 months,” said Seyffart, who added:

“This just shows how competitive these issuers expect things to be — and it’s going to be a battle to raise assets.”

Okay everyone. Here are the details for the #Ethereum ETFs that we expect to launch next week. We are only missing details for Proshares’s ETF. 7 of the 10 funds have fee waivers. pic.twitter.com/5v3QnHOeub

— James Seyffart (@JSeyff) July 17, 2024

There has been some concern over what will happen to Grayscale’s Ethereum Trust given the massive exodus from its Bitcoin fund, which lost more than 50% of assets under management since it converted to a spot ETF.

Grayscale will also charge a 0.25% fee for its mini ETH fund, according to recent filings. The firm has stated that 10% of its spot Ethereum ETF will establish its Ethereum Mini Trust, providing $1 billion in seed funding.

Hodl Capital estimated that a similar exodus from Grayscale’s ETHE fund could be as much as $10 billion in AUM.

Will Grayscale replicate the $GBTC fee mistake with $ETHE?

If so, expect 50%-60% outflows 👇 Just over $10 Billion AUM https://t.co/EB8IXDGPg4 pic.twitter.com/TFSzbnRvpZ

— HODL15Capital 🇺🇸 (@HODL15Capital) July 17, 2024

Ethereum Price Outlook

Ethereum prices are holding up following an increase of more than 10% over the past seven days. The asset was trading just over $3,400 at the time of writing, having fallen from a 17-day high of $3,500 yesterday.

There may be a little pump if and when ETFs go live, but it is likely that prices have already been factored in.