Historic Launch: Spot Ether ETFs See $361 Million in Early Trading Frenzy

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As a seasoned financial analyst with extensive experience in the ETF market, I have witnessed numerous launches over the years. The recent greenlighting of spot Ether ETFs by the SEC and their subsequent strong trading volumes within just 90 minutes of debut is an exceptional event that warrants attention.

The SEC in the United States has given its approval for the debut of Ether spot exchange-traded funds (ETFs), which commenced trading recently. In the first 90 minutes of trading, a substantial volume of $361 million was exchanged between investors in these ETFs.

According to Eric Balchunas, an analyst at Bloomberg Intelligence, these ETFs would place around the 15th position in terms of trading volume. Notably, this volume represents the top 1%.

As a crypto investor, I’ve noticed that the launch of a normal exchange-traded fund (ETF) usually generates over $1 million in trading volume on its first day. However, when it comes to Ether ETFs, which allow investors to gain exposure to Ethereum, the second-largest cryptocurrency by market capitalization, the trading volume has significantly surpassed that figure.

After 90 minutes, the total amount invested across all these funds stands at $361 million. This places them among the top 1% in terms of trading volume within the ETF market. To provide some context, this is around the same level as what’s traded for funds like $TLT and $EEM. However, it’s important to note that the launch of these funds has seen significantly more investment than typical new ETFs, which rarely exceed $1 million in trading volume on their first day.

— Eric Balchunas (@EricBalchunas) July 23, 2024

The Ether SPOT ETFs spearheaded by Grayscale and BlackRock have amassed significant assets with $147 million and $71 million respectively. Bitwise’s ETF trails behind, having achieved $50.4 million in assets, while Fidelity’s ETF recorded a volume of $49.3 million within the initial 90 minutes.

Today, Ether exchange-traded funds tracking the spot price began trading, yet Ethereum’s price has remained relatively unchanged. It has inched up by only 0.6% over the last 24 hours, keeping it below the $3,500 threshold, based on CryptoCompare’s data.

The introduction of Bitcoin spot ETFs this year significantly increased the demand for Bitcoin, pushing its price to a new record high of over $73,000 in March. Experts predict that the launch of spot Ethereum ETFs will draw approximately 20% of the inflows experienced by Bitcoin ETFs during their initial months.

As a crypto investor, I want to highlight that there’s ongoing debate among regulatory bodies about how to classify Ethereum (ETH). The Securities and Exchange Commission (SEC) has expressed doubts regarding whether ETH should be considered a security under their jurisdiction. On the other hand, the Commodity Futures Trading Commission (CFTC) has classified both Bitcoin (BTC) and Ethereum as commodities. So, it’s essential to keep an eye on regulatory updates that could impact the classification and potential regulations for these cryptocurrencies.

Ether employs a Proof-of-Stake mechanism for consensus, enabling token holders to lock up their funds to bolster network security and receive returns on their investment in the process. However, the Securities and Exchange Commission (SEC) has initiated a lawsuit against Consensys, a blockchain technology company, over its provision of staked Ether access through MetaMask.

None of the spot Ether ETFs currently being traded are able to stake the underlying ETH they hold.

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2024-07-23 19:20