The cryptocurrency market is preparing for the launch of the first Ethereum spot ETFs scheduled for today. This event, long awaited by investors, could lead to a “Sell the News” phenomenon. Why?
Ethereum Spot ETF: Launch Scheduled for Today
After months of anticipation and speculation, spot Ethereum ETFs could finally arrive during the day on July 23, 2024. This major event should facilitate access for institutional and retail investors to Ether (ETH), the second largest cryptocurrency in the crypto market in terms of market capitalization.
However, some analysts are questioning the potential impact of this launch on the price of ETH. They fear that the event does not result in a “Sell the News”where investors take advantage of the rise in prices linked to the news to cash in their profits.
👉 Learn more about ETFs – Bitcoin Spot ETFs Explained: Everything You Need to Know
Even if spot Ethereum ETFs are accepted within the day, their future performance remains uncertain.
“The launch of futures-based Ethereum ETFs in the US late last year was met with disappointing demand. All eyes are on the launch of spot Ethereum ETFs with high hopes for rapid asset accumulation,” said Will Cai, Kaiko's head of indices. “While a full picture of demand may not emerge for several months, ETH price could be sensitive to the inflow figures of the first few days.”
ETH was in a bearish trend after briefly performing in May following the approval of Grayscale and ProShares’ 19b-4 forms. It had previously retested the $4,000 level in March, when BTC was hitting its former all-time highs.
ETH Analysis Before and After Approval of Forms 19b-4
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Fees vary between different ETF issuers
The latest S-1 forms filed with the U.S. Securities and Exchange Commission (SEC) have revealed the amount of fees that Ethereum spot ETF issuers will charge their clients.
👉 Also in the news – $500 million in inflows in 24 hours for BlackRock’s Bitcoin Spot ETF
Although Grayscale will keep fees for its ETHE at 2.5%, The company will also offer its new Ehtereum spot ETF, the Grayscale Mini Trust, with the lowest fees on the market (0.15%)..
Comparison of fees on different Ethereum spot ETFs
To attract early investors, most issuers have opted for temporary fee exemptions on their ETFs. These exemptions vary from 6 months to 1 year, or until assets under management reach a certain threshold (between 500 million and 2.5 billion dollars for example).
This price war highlights the fierce competition in the crypto ETF market. Issuers operate on tight margins, which could explain the decision Ark Invest to withdraw from ETF race.
For its part, Bitwise announced that it would donate 10% of the profits from its ETH spot ETF to Ethereum developers who work in open source.
Cryptoast Research: Don't Spoil This Bull Run, Surround Yourself With Experts
Source: Kaiko Research
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