Bitwise Chief Investment Officer Matt Hougan said this week, “If you think about an investor who doesn’t have a specific view — who just wants exposure to what blockchains can do — their starting point would be to have exposure to both bitcoin and eth,” The U.S. Securities and Exchange Commission (SEC) has seemingly approved exchange-traded funds (ETFs) that hold ether, the world’s second-largest cryptocurrency. Trading is anticipated to commence as early as Tuesday, following the submission of additional registration statements by several fund issuers on Monday afternoon. Notices from exchanges indicate that the funds will soon be available, suggesting SEC approval. Although the SEC did not immediately respond to requests for comment, it had previously approved rule changes in May to allow exchanges to list ether funds.
Prominent asset managers like BlackRock, Fidelity, and VanEck, along with crypto-focused firms such as Bitwise, 21Shares, and Grayscale, are preparing to launch ether funds. Grayscale plans to transform its substantial Ethereum Trust into two ETFs with different fee structures. This development comes approximately six months after the successful introduction of bitcoin ETFs, which garnered significant investor interest, accumulating over $16 billion in net inflows, led by the iShares Bitcoin Trust (IBIT).
While ether funds are not expected to match the popularity of bitcoin funds—given ether’s market size is about one-fourth that of bitcoin—they are still projected to perform well. Matt, predicts these funds could attract $15 billion within their first 18 months. Hougan believes many investors will seek exposure to both bitcoin and ether to diversify their blockchain investments. Notably, while there are existing funds that use ether futures contracts, these new ETFs will be the first in the U.S. to hold spot ether, marking a significant milestone for cryptocurrency investment options.
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