Spot Ethereum exchange-traded funds (ETFs) are set to launch on July 23, and initial inflows into these products could impact the cryptocurrency’s price, according to a report from Kaiko. Following the SEC’s approval of exchange rule changes for these funds, ETF issuers have finalized details with the SEC, including fee structures disclosed in recent S-1 filings.
“The launch of ETH futures ETFs in the US late last year was met with underwhelming demand, with all eyes on the ETF launch with high hopes of a quick accumulation of assets,” said Will Kai, head of indices at Kaiko. “While the full picture of demand may not be clear for several months, the ETH price may be sensitive to inflows in the early days.”
Grayscale plans to convert its ETHE trust into a spot ETF and launch a mini-trust that will hold $1 billion of the former fund. ETHE’s fees will remain at 2.5%, higher than its competitors.
ETHE’s discount to net asset value (NAV) has narrowed recently, suggesting that traders may buy back shares at the NAV price upon conversion for a profit.
Most issuers offer fee waivers, ranging from no fees for six months to a year, or until assets reach $500 million to $2.5 billion. This competitive environment has forced Ark Invest to exit the ETH ETF race.
ETH price briefly jumped in May after the 19b-4 approval, but has since trended lower. ETH implied volatility increased over the weekend, with the July 26 contract rising from 59% to 67%, indicating uncertainty surrounding ETH’s launch.
