The U.S. Securities and Exchange Commission (SEC) has greenlit at least two of the eight applications to launch exchange-traded funds (ETFs) tied to the price of ether.

Starting Tuesday, new ETFs from BlackRock, VanEck, and six other firms will be available for trading across three major exchanges: Cboe, Nasdaq, and NYSE.

Several spot ether ETFs are set to start trading on July 23, 2023, following SEC approval. Ether, the native cryptocurrency of the Ethereum network and the second-largest by market cap, will underpin these new financial products.

As of Monday evening, the following spot ether ETFs had been approved:

• 21Shares Core Ethereum ETF (CETH)
• Bitwise Ethereum ETF (ETHW)
• Fidelity Ethereum Fund (FETH)
• Franklin Ethereum Trust (EZET)
• Invesco Galaxy Ethereum ETF (QETH)
• iShares Ethereum Trust ETF (ETHA)
• VanEck Ethereum ETF (ETHV)

Updated documents for Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Mini Trust (ETH) had not yet been released at the time of writing. Ether saw a 2% decline in trading on Monday.

Optimism Surrounding Spot Ether ETFs The introduction of spot bitcoin ETFs in January led to a surge in demand for bitcoin, contributing to record highs in March. Analysts, including Bloomberg Intelligence’s James Seyffart, anticipate that spot ether ETFs could capture 20% to 25% of the flows seen by bitcoin ETFs in their early months. Bitwise Chief Investment Officer Matt Hougan predicts these new ETFs could drive ether prices above $5,000 and amass up to $15 billion in assets over 18 months.

Staking and Regulatory Questions Ethereum operates on a proof-of-stake consensus mechanism, unlike Bitcoin’s proof-of-work system. This involves ether holders staking their tokens with validators to participate in transaction verification, earning rewards in return. However, the SEC has previously raised questions about whether ether and staking constitute securities offerings.

Recently, the SEC sued blockchain technology firm Consensys over staked ether offerings via their MetaMask wallet. As a result, none of the approved spot ether ETFs will be able to stake the ether they hold, potentially reducing returns for investors.

SEC Commissioner Hester Peirce indicated that features like staking could be reconsidered in the future, similar to certain aspects of bitcoin exchange-traded products.

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