Markets
ETF Ether: first day of listing
An ether cryptocurrency coin is seen in this photo.
Jaap Arriens | Nurphoto | Getty Images
Ether exchange-traded funds officially began trading in the United States on Tuesday, putting the world’s second-largest cryptocurrency in a vehicle favored by many investors and professional advisors.
The new funds come from traditional fund issuers such as Black rock and Fidelity and crypto-focused firms such as Grayscale, marking another step in the increased integration of digital assets into traditional finance.
Ether is the native cryptocurrency on the The Ethereum blockchainWhile bitcoin is often touted as a kind of digital gold, ether is seen more as a bet on the growth of blockchain and crypto in general.
“Ethereum’s appeal lies in its decentralized nature and its potential to drive digital transformation in finance and other industries,” Jay Jacobs, BlackRock’s U.S. head of active and thematic ETFs, said in a press release.
Bitcoin ETFs have generated approximately $17 billion in net inflows since their inception. launch in JanuaryAccording to FactSet, a historically successful launch. Ether ETFs are generally expected to be smaller than bitcoin funds, both because of the relative size of the two markets and because ether may not be as familiar to many investors.
“Ethereum is a little more confusing and fuzzy for individual investors, as well as institutional investors,” said Sam Callahan, senior analyst at Swan Bitcoin.
Ether ETFs also do not offer staking, a process that can offer crypto-native investors additional yield.
Many funds launching this week are benefiting from temporary fee waivers to attract clients. After these waivers, management fees range from 0.15% to 2.50%.
The cheapest and most expensive funds come from Grayscale, which is effectively converting its multi-billion dollar private ether fund into two ETFs with different prices.
New Ether ETFs
| Teleprinter | Subsequent exemption fees |
| ETH | 0.15% |
| EZET | 0.19% |
| ETHV | 0.20% |
| ETHW | 0.20% |
| CETH | 0.21% |
| FETH | 0.25% |
| QETH | 0.25% |
| ETHA | 0.25% |
| ETHÉ | 2.50% |
The price of ether has increased by more than 50% since the beginning of the year, but has remained roughly flat over the past month. The cryptocurrency does not appear to have enjoyed the same surge in demand before the launch of the funds that bitcoin saw in January.
“I think overall the balance of risks is favorable given that markets have pulled back and sentiment is at a level where there is room to be pleasantly surprised,” said Joel Kruger, strategist at LMAX Group.
The price of the cryptocurrency was down less than 1% on Tuesday.
See the table…
Ether is up more than 50% year-to-date.
The U.S. Securities and Exchange Commission (SEC) has long been skeptical of cryptocurrencies, but the regulator lost a legal battle last year over Bitcoin ETFs, leading to their introduction in January. Given that both Bitcoin and Ether already have regulated futures markets, Ether ETFs were seen as the next logical step for the sector.
The SEC’s decision to allow the funds to go through has been criticized by some, including consumer advocacy group Better Markets.
Still, some investors and advisors might make small allocations to these crypto ETFs as a diversification play without taking on too much risk, said Wei Hu, vice president of financial research and strategy at Edelman Financial Engines.
“We don’t think an investor should hold a lot of either of these stocks,” Hu said.