SEC Approves Ethereum Spot Exchange Traded Funds Amidst Rising Demand


In an unexpected move, the US Securities and Exchange Commission (SEC) has given a green light to the Ethereum Spot Exchange Traded Funds (ETFs), causing a flurry of revised S-1 forms to flood their offices. This follows a directive from the SEC urging all asset managers to turn in their draft S-1 filings on Friday, eager to begin their endeavors with an Ether Spot ETF.

Franklin Templeton, a leading asset management firm, made headlines as the first potential issuer to unveil a proposed sponsor fee for the Ethereum Spot ETF. Based in New York, Franklin Templeton proposes to levy a modest fee of 0.19% for its Ether spot ETF if it gains approval. This translates to a $1.90 charge for every $1000 invested, designed to offset the management and operational expenses associated with the ETF.

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The announcement of sponsor fees in any ETF market can stimulate investments, acting as a valuable draw. Thus, Franklin Templeton’s disclosure may well set a precedent, shaping the market response with other asset managers potentially aligning their investment figures to remain appealing.

Of significant mention is the parity between the proposed Bitcoin spot ETF charge – Franklin Templeton offers an identical sponsor fee at 0.19%, making it one of the most competitive in the specific ETF sphere. Not to be left behind, other notable issuers, including VanEcK, Invesco Galaxy, Grayscale, BlackRock, and 21Shares, have submitted their revised S-1 forms to the SEC.

Although the 19b-4 forms of these ETF applications received approval on May 23, the S-1 forms processing remains a key aspect for the commencement of trading. Though this phase might be protracted, as the SEC may require further amendments based on their comments on the submitted S-1 forms.

Meanwhile, renowned investment bank JPMorgan speculates a lesser demand for Ethereum Spot ETFs. Analysts at the banking giant suggest these ETFs may attract a mere $3 billion in investments by 2024, potentially rising to $6 billion with the inclusion of staking. By contrast, the Bitcoin spot ETFs launched earlier in the year are reportedly valued at a staggering $13.69 billion, according to data from SoSoValue.

Bloomberg analyst James Seyffart echoed JPMorgan’s predictions in a recent interview, underlining the vast discrepancy in the market caps of Ethereum and Bitcoin.

As of now, Ethereum is trading at $3,777, experiencing a modest gain of 0.45% over the last 24 hours. Concurrently, the asset’s daily trading volume increased by 4.80%, valuing it at $15.40 billion.