After a tumultuous battle, the U.S. Securities and Exchange Commission (SEC) gave “preliminary approval” to several asset managers planning to launch the spot for Ethereum exchange-traded funds (ETFs) this week. 

Industry sources told Reuters that the SEC has reportedly instructed asset managers to submit final-offering documents to the regulator before the end of the week. The applicants included BlackRock, Franklin Templeton, and VanEck, though one said all eight are expected to launch simultaneously.

Trading is expected to begin on Tuesday, July 23. 

What are Spot Ether ETFs?

Ethereum is the second-most popular form of cryptocurrency, second to Bitcoin. Soon, it will hit the trading floor in the form of spot Ether ETFs, a form of currency backed by the actual price of Ethereum rather than future contracts. As an ETF, the asset will become easier to invest in and trade, likely bringing crypto further into the mainstream. 

What to expect

Spot Bitcoin ETFs launched in January. Now, spot Ether ETFs may outperform Bitcoin following the launch, according to a new report from Kaiko, which highlighted the Ether-to-Bitcoin price ratio. It takes more Bitcoin to purchase an Ether token, a trend that is expected to continue when ETFs launch next week. As the metric trends upward, so will the price of Ether relative to Bitcoin (and vice versa).

“The ETH to BTC, which measures the relative performance of the two assets, remains elevated [at] around 0.05,” the report said. “This is significantly higher than preapproval levels of near 0.045. A stronger ratio suggests ETH could continue to outperform relative to BTC following ETF launches.”

Projections have been all over the map. However, Bitwise predicts $15 billion of inflows over nine months for an Ethereum ETF. According to a report by Citigroup, inflows are projected at 30% to 35% of those for a Bitcoin spot ETF—an inflow of between $4.7 billion and $5.4 billion within the first six months of the launch.

Why launch now?

ETFs had previously been rejected by the SEC due to concerns about market manipulation. In August 2023, after a three-judge panel on the D.C. Court of Appeals in Washington ruled that the SEC was wrong to reject digital asset manager Grayscale’s proposed Bitcoin ETF, the agency was forced to approve ETFs. It still warned of the product’s risks. In June 2024, the SEC dropped its investigation into the smart contract protocol. 

Ahead of the launch, searches for Ethereum are up. According to Google Trends data, the term “Ethereum” rose in searches from a score of 57 out of 100 on July 14 to 82 on Monday. Ether is trading at $3,484, up 6.7% over the last 24 hours. 

Upon approval, spot Ether ETFs would be listed on the Nasdaq, New York Stock Exchange, and the Chicago Board Options Exchange.

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