Ether ETFs Approved for Trading! Here’s How Experts See Them Performing

• Ether ETFs are set to go live for trading following SEC approval.
• Ahead of imminent trading, experts have weighed in on how spot ether ETFs will perform in the first year.
• The soon-to-be-launched products will likely face an outflow challenge in the first few weeks.

Crypto community members have long desired spot ETFs to onboard traditional investors and potentially inject trillions of dollars into the market. Over the past seven months, the industry has finally gotten a glimpse of what the demand for crypto exposure among traditional investors is like, thanks to the SEC’s landmark decision to approve spot Bitcoin ETFs for trading in January 2024. Within a few months, these products have seen net inflows of over $16 billion, which have helped drive prices higher.

Seeing the success of Bitcoin ETFs, it is no surprise that the Ethereum community has been brimming with pent-up excitement following an SEC decision on May 23 to approve a rule change paving the way for spot ether ETFs. After nearly two months of waiting, these products have finally gotten the SEC’s green light for trading.

Ether ETFs Are a Go!

Ether ETFs are a go for trading as early as tomorrow, Tuesday, July 23. The development comes as the SEC has finally made registration statements, also known as S-1 filings, effective after nearly two months of discussions.

As of the time of writing, ether ETF issuers to have received the SEC’s greenlight include 21Shares , Bitwise , BlackRock , Fidelity, Franklin Templeton , Invesco Galaxy, and VanEck .

With these issuers already securing exchange listings for their products over the weekend, trading is expected to kick off as soon as Tuesday, July 23. Ahead of trading, several experts and firms have weighed in on how these funds will likely perform.

Not What Many Expect?

Despite the anticipation, a number of analysts suggest that spot ether ETFs may not get the level of inflows that many expect. On Monday, July 22, Wintermute indicated that it expected spot ether ETFs to rake in only about $3.2 billion to $4 billion in net inflows within the first year compared to about $32 billion anticipated for Bitcoin ETFs.

Wintermute explains that its view is influenced by the SEC’s decision to prevent issuers from offering staking services , which could provide more returns to investors. According to the market maker, this exemption made ether ETFs less attractive to investors. Still, the firm suggested that ether could rise 18% to 24% to about $4,200 due to the predicted flows, albeit below the asset’s 2021 all-time high of about $4,800.

Wintermute is not the only one to predict that ether ETFs will only see a fraction of the flows to Bitcoin ETFs. In May 2024, Bloomberg Senior ETF Analyst Eric Balchunas contended that spot ether ETFs were likely to only take 15% to 20% of flows to spot Bitcoin ETFs. Like Wintermute, Balchunas tipped lack of staking as a key factor. Beyond the lack of staking, the analyst also pointed out the disparity in the market caps of both assets.

Still, not all analysts are as pessimistic as Wintermute and Balchunas. In June 2024, Bitwise predicted that spot ether ETFs would likely see $15 billion in net inflows in the first year. While still below expected Bitcoin numbers, the figure is significantly higher than other predictions. At the same time, the firm’s Chief Investment Officer Matt Hougan has tipped inflows to send ether to new all-time highs above $5,000.

Whatever the long-term case, in the first few weeks of trading, spot ether ETFs are likely to see a significant outflow challenge from Grayscale’s $10 billion fund due to its significantly higher fees .

On the Flipside 

• Ether has not reacted to the news of the recent ETF approval trading just above the $3,400 price point, representing a 2.45% slide in the past 24 hours per CoinMarketCap data at the time of writing.
• With spot ether ETF approvals all but guaranteed in recent weeks, the crypto community has begun to shift speculation to other altcoins like Solana .

Why This Matters

Like spot Bitcoin ETFs, the crypto community has been pushing for spot ether ETFs for years. As such, the recent SEC approval marks the end of a years-long struggle, opening the door to an era of greater crypto legitimization.

Read this for more on the recently approved spot ether ETFs:

Ether ETF Fees Revealed! Issuers File “Final” S-1s with SEC

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