Report: Spot Ethereum ETF may start trading on July 23

On Monday, July 15th, Eastern Time, it was reported that the U.S. Securities and Exchange Commission (SEC) has issued final guidance to asset management companies preparing to launch Ethereum Exchange-Traded Funds (ETFs). These companies are required to submit their final prospectuses by July 16th in order to launch new ETF products on July 23rd. The final submission to the SEC must include details of the fees planned to be charged in the new crypto fund.

Previously, on May 23rd, the SEC approved a 19b form submitted by the issuer, proposing rule changes that allow for investment tools based on cryptocurrencies. Currently, asset management companies are awaiting approval for their initial securities registration S-1 form.

Several major financial institutions are vying for approval and initial public offering of Ethereum ETFs. These include BlackRock, Grayscale, Fidelity, ARK 21Shares, Invesco Galaxy, VanEck, Hashdex, and Franklin Templeton, among others. To meet regulatory requirements, issuers such as ARK Investments and Fidelity have recently removed the staking feature from their Ethereum ETF plans.

Market forecasts predict significant inflows of funds into Ethereum ETFs. Analysts expect that Ethereum ETFs will attract great interest from investors and may attract as much as $10 billion in new funds in the first few months after launch. Tom Dunleavy, Managing Partner at MV Global, predicts:

"We've seen inflows of $15 billion into Bitcoin, and I think inflows into Ethereum ETFs could be between $5 billion and $10 billion."

This news has sparked market enthusiasm, with the second-largest cryptocurrency Ethereum rising by 10.50% on Monday to $3,447.00, reaching a high of $3,464.00 during the session. In addition, other mainstream cryptocurrencies also surged by over 10%, with the largest cryptocurrency Bitcoin rising by 10.61% to $63,985, briefly hitting its highest point in at least two weeks at $64,210.

Research firms also point out that Ethereum's performance is expected to outperform Bitcoin after the ETF launch. Blockchain market data provider Kaiko stated that following the news of the U.S. Securities and Exchange Commission's initial approval of Ethereum Exchange-Traded Funds (ETFs), Ethereum's price relative to Bitcoin increased from 0.045 to around 0.05 The launch of an Ethereum ETF may drive this cryptocurrency to continue to outperform its larger competitor Bitcoin.

The Ethereum-to-Bitcoin ratio (ETH/BTC) measures the amount of Bitcoin needed to purchase one Ethereum token. A higher ratio indicates a higher relative value of Ethereum. Kaiko pointed out that since the SEC approved the first phase of the ETF on May 23, the price of Ethereum has dropped by about 10% to $3,380. Despite the overall market price decline, the increase in the Ethereum-to-Bitcoin ratio suggests an increasing relative value of Ethereum. This may indicate that investors are more confident in Ethereum's future performance, especially against the backdrop of the upcoming ETF launch.

Matthew O'Neill, Co-Head of Research at Financial Technology Partners, stated that the introduction of an Ethereum ETF will allow institutional investors to diversify their cryptocurrency portfolios beyond just Bitcoin products, and they may hold both products simultaneously. O'Neill added that the possibility of ETF approval has not been fully reflected in market prices yet, as some investors are still waiting for the day when ETFs officially start trading. Therefore, he believes that there is still room for Ethereum's price to rise.

As for fees, it is reported that the management fees for Ethereum ETFs vary by company. Invesco and Galaxy have set a management fee of 0.25%, slightly higher than VanEck and Franklin Templeton's 0.20% and 0.19%. However, these fees are significantly lower than the 2.50% management fee of Grayscale's Ethereum Trust Fund. Grayscale plans to launch a new spot Ethereum ETF, but specific fees have not been disclosed yet