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Will Ethereum Get its Own ETF?

By Evan Jones10/23/2023

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Though it was a false report, a report circulated last week that said that a spot Bitcoin ETF had been approved. What followed was a fast jump up in price by Bitcoin, reaching $30k USD before the news that it was a false report came out, sending the asset back down into the $28k range (although its since recovered $30k). It was interesting to see just how fast the digital asset went up in price and was perhaps a preview of what’s to come regarding BTC price action if and when a spot ETF is truly approved.

Ethereum, the second largest asset by market cap following Bitcoin, is also an asset that is looking to break into the spot ETF market. Much like Bitcoin, Ethereum has futures ETFs available, but no spot. What would it mean for crypto if and when Ethereum gets an ETF? Let’s discuss.

Grayscale Looks to Convert 

After winning a legal victory against the SEC regarding their Bitcoin ETF which was previously rejected, Grayscale has now turned its sights to their Grayscale Ethereum Trust. The Grayscale Ethereum Trust, much like their Bitcoin Trust, is the largest Ethereum investment product in the world. 

In early October, Grayscale Investments, in conjunction with NYSE Arca, filed for approval from the SEC to convert their Grayscale Ethereum Trust (ETHE) to a spot Ethereum ETF. Though both the Bitcoin and Ethereum spot ETFs will still need to be approved, there is likely much optimism for Grayscale and others such as Blackrock when it comes to the SEC approving crypto spot ETFs. 

What It Would Mean for Crypto?

Much like the Bitcoin spot ETF, a spot Ethereum ETF will bring a large air of legitimacy to the digital asset sector. Though there are futures ETFs available for both BTC and ETH, the SEC has now long avoided approving spot ETFs for the two top crypto assets by market cap. As seen with the quick upswing in price for BTC when the false reports of a spot ETF having been approved, the same thing may occur if and when a spot Ethereum ETF is approved.

Overall, until there are spot ETFs for both these assets, it seems unlikely that they’ll be able to be the disruptive technology they’re touted to be. When spot ETFs get approved for two of the top crypto assets, it will likely provide comfort to any institutional or retail investor who has been avoiding investing due to uncertainty regarding regulation of these assets. Spot ETF approval would be a stamp of approval on digital assets to many investors, possibly stirring the next bull run. 

Closing Thoughts: ETFs for All

Assuming the analysts are correct and the SEC is going to approve spot ETFs for Bitcoin, and hopefully Ethereum soon thereafter, it will likely start a trend of other digital asset ETFs being applied for.

Assets like Polygon (MATIC), Solana (SOL), and Cardano (ADA) are all likely to have ETF filings if Bitcoin finally gets its spot ETFs. It will be incredibly interesting to see how the market shapes up when these approvals are finally made.

Article tags

ethereum
Evan Jones

Author

Evan entered the crypto scene in 2017, attracted to the many disruptive possibilities that blockchain could have on current world systems. He has a keen interest in decentralized services, payment processing, and viable NFT use cases such as event ticketing. He spends his days writing with his dog Kobe under his feet, if not on his lap.

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