First ether ETF listings marked as approved, more to come
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Illustration: Annelise Capossela/Axios
The world's second largest cryptocurrency will be accessible to U.S. investors starting Tuesday in a regulated ETF on major public exchanges, with a few issuers already seeing their applications going effective and others saying theirs is expected to hit soon.
Why it matters: The spotlight is now on ether, the Ethereum blockchain's native token, as the latest digital asset to be legitimized as an investment.
Between the lines: The crypto industry appears to be counting on exchange-traded funds to take ether prices to new highs.
- Some traders are eyeing a new record, expecting ether's price to surpass it's Nov. 2021 all-time high of $4,867.60, from its current level of around $ 3,470.
Flashback: Not long after the January debuts of bitcoin ETFs, the world's largest digital asset smashed through its prior ceiling and posted a fresh all-time high.
Yes, but: Demand for ether ETFs are estimated to be a fraction of the $15 billion that those for bitcoin accumulated through mid-June, roughly five months after they began trading.
- Galaxy Research recently said it expects roughly $1 billion in monthly inflows for ether funds over their first five months.
Fun fact: Ether's 10-year anniversary was Sunday — its ICO started July 22, 2014.
State of play: The eight-firm horse race between the initial ether fund issuers — Bitwise, Fidelity, Grayscale, Franklin Templeton, Invesco/Galaxy, BlackRock's iShares, 21Shares, and VanEck — now begins.
- There are two firms that launched bitcoin ETFs but won't be doing the same for ether. Cathie Wood's Ark Invest dropped out, and CoinShares's Valkyrie isn't participating.
What we're watching: Grayscale's mini ether ETF, which offers a fraction of the underlying ether per share of its other, big-brother ETF, will be the pony to watch in terms of retail pickup.
Zoom in: Like the bitcoin ETFs, the ether ETFs will only allow for cash creations and redemptions — meaning when new shares are created, or redeemed, the issuer will use cash to buy bitcoin, or conversely, sell bitcoin for cash.
- Staking — the act of taking a token and pledging it for a reward, a feature of the Ethereum blockchain's proof-of-stake validation mechanism — isn't a part of any of the proposed ETFs.
- That stands to be beneficial for direct ether token holders, already inspiring yield-trade strategies.
