Ethereum ETF Race Intensifies as Issuers Prepare for Imminent Launch

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

On July 18, ETF Store President Nate Geraci noted that the final S-1s were from potential one-time ETH ETF issuers. Form S-1 is the initial securities registration form required by the SEC for public companies.

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

It looks like the *Final* IN S-1s of potential spot ETF issuers now…

2 months ago, almost everyone thought they had no chance of approval.

Next step = release (sounds like Tuesday)!

— Nate Geraci (@NateGeraci) July 17, 2024

ETH ETFs are in the works

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

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

“Seven out of 10 ETFs that have launched are coming out with fee waivers, some waiving the fee entirely for six months to 10 months,” said Seyffart, who added:

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

OK everyone. Here are the details of the #Ethereum ETF we expect to launch next week. We’re just missing details for the Proshares ETF. 7 out of 10 funds have fee waivers. pic.twitter.com/5v3QnHOeub

— James Seyffart (@JSeyff) July 17, 2024

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

Grayscale will also charge a 0.25% fee for its ETH mini pool, according to recent filings. The firm has stated that 10% of its cash 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 reach $10 billion in AUM.

Grayscale will replicate the $GBTC rate error with $ETHE?

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

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

Ethereum Price Outlook

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

There may be a bit of a bombshell if and when ETFs go live, but chances are the prices have already been factored in.

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