Key points:

  • Ether exchange-traded funds (ETFs) made an impressive debut in the United States, with first-day trading volume reaching $1.07 billion.
  • The most popular ETFs were Ethereum ETFs from Grayscale ($450 million), iShares ($245 million) and Fidelity ($137 million).
  • The new ETFs are structured as commodity-based trusts.

US exchange-traded funds (ETFs) based on the price of ether made an impressive debut on Tuesday. During the first day of trading, the volume of transactions with these products reached $1.07 billion.

Bitwise reports that the most popular Ethereum ETFs were from Grayscale, with trading volume exceeding $450 million. iShares Ethereum Trust and Fidelity Advantage Ether ETF took second and third places with $245 million and $137 million, respectively.

Ether ETF Debuts in the US: details

In addition to the already well-known Grayscale, iShares and Fidelity, Ether ETFs from Franklin Templeton, VanEck, 21Shares and Invesco joined trading on the US exchange on Tuesday.

Following on the heels of nine spot Bitcoin ETFs launched in the US in January, the Ether products mark yet another success for the cryptocurrency industry in its push to popularize digital assets. Analysts, however, predict that these products are unlikely to attract the same volume of investment as Bitcoin ETFs.

Trading volumes on Tuesday fell short of the $4.6 billion that Bitcoin ETFs received on their January debut. Data on inflows into Ethereum ETFs will be available on Wednesday morning.

While Ethereum ETFs may not be as attractive to investors as Bitcoin ETFs, they are also an important milestone in the development of the cryptocurrency market.

The price of ether, the second-largest cryptocurrency after Bitcoin, fell on Tuesday, sending prices of new ETFs tumbling, according to CoinGecko. At market close, Ether was trading unchanged at $3,486.75.

Another step towards institutional recognition of cryptocurrency

Market participants consider the debut of ETFs for ether a significant event in the long-term struggle for the recognition of ether not as a security, but as a commodity.

Although the US Securities and Exchange Commission (SEC) hasn’t made an official statement regarding the classification of ether as a commodity, the new ETFs are legally structured as commodity-based trusts. The launch of the Bitcoin ETF in January 2024 was the culmination of a decade-long battle with the SEC, which had previously rejected similar products over concerns about market manipulation.

The SEC was forced to approve the ETF after digital asset manager Grayscale Investments lost in court. At the same time, the agency emphasized the high degree of risk of these products. The launch of the Bitcoin ETF became one of the most successful in the history of the ETF market, attracting $33.1 billion in net inflows as of June 2024.

Bitcoin ETF issuers competed aggressively on fees, with many offering temporary fee waivers.

According to IPO documents, fees for the Ether ETFs range from 0.19% for the Franklin Templeton ETF to 2.5% for the Grayscale Ether Trust, which will later be converted into an ETF. Most other ETFs have fees in the 0.25% range.

In general, fees for Ethereum ETFs are comparable to fees for Bitcoin products, but issuers of Ethereum ETFs offer fewer incentives. Grayscale, for example, released a “mini version” of its Ethereum ETF with a fee of just 0.15%.