An Ethereum cryptocurrency coin can be seen in this photo.
Yap Arians | Noor Photos | Getty Images
Ethereum exchange-traded funds officially began trading in the United States on Tuesday, making the world’s second-largest cryptocurrency a favored vehicle for many professional investors and advisors.
New funds are coming from traditional fund issuers, e.g. black stone Cryptocurrency companies such as Fidelity and Grayscale mark another step in the further integration of digital assets into mainstream finance.
ether Is the native cryptocurrency on the Ethereum blockchain. While Bitcoin is often promoted as digital gold, Ethereum is seen more as a bet on the broader growth of blockchain and cryptocurrencies.
“Ethereum’s appeal lies in its decentralized nature and its potential to drive digital transformation in finance and other industries,” Jay Jacobs, head of U.S. active and thematic ETFs at BlackRock, said in a press release. .
Data from FactSet shows that the Bitcoin ETF has received approximately $17 billion in net inflows since its launch in January, a historically successful launch. Ethereum ETFs are widely expected to be smaller than Bitcoin funds, not only because of the relative size of the two markets, but also because many investors may be less familiar with Ethereum.
“Ethereum is a bit confusing and unclear to individual investors and institutional investors alike,” said Sam Callahan, senior analyst at Swan Bitcoin.
The Ethereum ETF also does not offer staking services, a process that can bring additional benefits to native cryptocurrency investors.
Many funds due to launch this week have implemented temporary fee reductions to attract customers. After exemption, the management fee ranges from 0.15% to 2.50%.
Both the cheapest and most expensive funds come from Grayscale, which is effectively converting its multi-billion-dollar private ether fund into two ETFs at different price points.
New Ethereum ETF
| fund | stock ticker | Fees after exemption |
|---|---|---|
| Grayscale Ethereum Mini Trust | Ethereum | 0.15% |
| Franklin Ethereum ETF | ezette | 0.19% |
| VanEck Ethereum ETF | Ethereum | 0.20% |
| Bitwise Ethereum Fund | Ethereum | 0.20% |
| 21 Core Ethereum ETFs | European Ethereum | 0.21% |
| Fidelity Ethereum Fund | conquer | 0.25% |
| Invesco Galaxy Ethereum ETF | shave | 0.25% |
| iShares Ethereum Trust | ETHA | 0.25% |
| Grayscale Ethereum Trust | He said | 2.50% |
source: Fund filing and website
Ethereum’s price is up more than 50% so far this year, but has been essentially flat over the past month. Ahead of the fund’s launch, demand for the cryptocurrency did not appear to be surging as it was for Bitcoin in January.
“I do think the overall risk balance is favorable given that the market has pulled back and overall sentiment is in surprising territory,” said LMAX Group strategist Joel Kruger.
The price of the cryptocurrency fell by about 2% on Tuesday.
Ethereum is up more than 50% so far this year.
The U.S. Securities and Exchange Commission has long been skeptical of cryptocurrencies, but the regulator lost a Bitcoin ETF lawsuit last year and launched a Bitcoin ETF in January. Since both Bitcoin and Ethereum already have regulated futures markets, an Ethereum ETF is seen as the next logical step for the industry.
The SEC’s decision to allow the funds was criticized by some, including consumer advocacy group Better Markets.
However, Hu Wei, vice president of financial research and strategy at Edelman Financial Engines, said that some investors and advisors can make small allocations to these crypto ETFs as a diversified investment without taking on too much risk.
“We don’t think investors should hold large amounts of any of them,” Hu said.
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