CBOE Announces Official Launch Date for Spot Ethereum ETF

The Chicago Board Options Exchange (CBOE) has announced that five spot Ethereum exchange-traded funds (ETFs) will begin trading on July 23, pending regulatory effectiveness.

The announcement follows the approval of rule changes by the United States Securities and Exchange Commission (SEC) on May 23, allowing for the listing of spot Ether ETFs.

However, the launch is subject to final approval of each fund issuer’s respective S-1 registration statements by the regulator.

Here Are Five Ether ETFs Set to Start Trading

The five spot Ether ETFs that will commence trading are the 21Shares Core Ethereum ETF, Fidelity Ethereum Fund, Invesco Galaxy Ethereum ETF, VanEck Ethereum ETF, and Franklin Ethereum ETF.

To gain an early market advantage, most of the ETF issuers have announced plans to temporarily waive or discount fees, aiming to compete for market share once the products are available for trading.

Analysts in the industry predict that Ether ETFs could attract billions of dollars in net inflows in the months following the launch.

The increasing demand from institutional investors seeking to include Ether in their ETFs could potentially lead to a supply crunch.

The Ethereum Exchange Reserve, which tracks the amount of available Ether for purchase on cryptocurrency exchanges, is currently at multi-year lows.

A recent report by Kaiko highlighted Ether’s 1% market depth and suggested that lower liquidity could result in heightened price volatility, potentially causing Ether to outperform Bitcoin in terms of percentage gains.

Tom Dunleavy, an institutional analyst, believes that inflows into Ethereum ETFs could reach $10 billion this year, with capital flows of up to $1 billion per month.

Dunleavy expressed optimism about the price impact and anticipated new all-time highs for Ether by early Q4.

Update: Nate's instincts were right, hearing SEC finally gotten back to issuers today, asking them to return FINAL S-1s on Wed (incl fees) and then request effectiveness on Monday after close for a TUESDAY 7/23 LAUNCH. This is provided no unforeseeable last min issues of course! https://t.co/D21FD9Qf94

— Eric Balchunas (@EricBalchunas) July 15, 2024

Similarly, 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 the increased withdrawals from exchanges to cold storage indicated that Ether holders expected future price appreciation.

Ethereum ETF Approval Was Political

Bloomberg ETF analyst James Seyffart believes the approval of spot Ethereum ETFs was likely influenced by political decisions rather than purely financial considerations.

In a recent interview, Seyffart suggested that the political climate, including actions by the Biden administration and responses from the crypto community, played a significant role in the approval to go through.

Beyond Bitcoin and Ethereum, the approval of other crypto ETFs, including Solana, is unlikely without significant regulatory changes, Seyffart said.

He noted that a regulated market is needed to monitor these assets for fraud and manipulation.

In contrast, crypto investor and trader Brian Kelly has suggested that Solana could potentially become 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 then 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.”

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