Are you ready for the 9 Ethereum spot ETFs launching on July 23? Here’s what you need to know to start trading.
After years of regulatory resistance and countless revised registration documents, a spot Ethereum exchange-traded fund (ETF) has finally hit the market.
For the first time, publicly traded Ethereum (ETH) ETF shares will be listed on some of the most popular U.S. brokerage platforms, joining stocks such as Apple Inc. (AAPL) and the SPDR S&P 500 ETF Trust (SPY).
The much-anticipated listing is a defining moment for the cryptocurrency market and an opportunity for millions of U.S. institutional and retail investors. Here’s what you need to know to make the most of it.
When will the spot Ethereum ETF be available?
The Chicago Board Options Exchange (CBOE) confirmed July 23 as the launch date for five ETFs trading on its platform : the 21Shares Core Ethereum ETF, the Fidelity Ethereum Fund, the Invesco Galaxy Ethereum ETF, the VanEck Ethereum ETF, and the Franklin Ethereum ETF.
The other four spot ETH ETFs will trade on either Nasdaq or New York Stock Exchange (NYSE) Arca. Although these exchanges have yet to make an official announcement, they are widely expected to be listed on July 23 as well.
Where can I buy Ethereum ETF shares?
The short answer: Just about any major brokerage platform. Each of the ETH spot ETFs that came to market in the last week of July has received regulatory approval to trade on at least one major U.S. exchange — specifically, Nasdaq, New York Stock Exchange (NYSE) Arca, or Cboe BZX.
Everyday investors don’t trade directly on these exchanges. Instead, they rely on brokerage platforms (household names like Fidelity, E*TRADE, Robinhood, Charles Schwab, and TD Ameritrade) as intermediaries.
Once the ETH ETF shares are listed on a public exchange, it is expected that all reputable brokerage firms and other institutions will be able to facilitate trading.
What are my options and how do I know which is best?
Nine spot Ethereum ETFs are set to begin trading soon. In terms of the underlying mechanics, these funds are nearly identical. Each ETF is sponsored by a reputable fund manager, holds spot ETH through a qualified custodian, and relies on a core group of professional market makers to create and redeem units. They also all enjoy the same standard investor protections, including insurance against broker bankruptcy and cybersecurity risks.
For most investors, the decision comes down to fees. Eight of the nine ETFs have management fees between 0.15% and 0.25%. The only exception is the Grayscale Ethereum Trust (ETHE), which began trading in 2017 under a different fund structure but still has a 2.5% management fee.
Comparison of the Top Nine Spot Ethereum ETFs
Most, but not all, Ethereum ETFs are temporarily waiving or reducing fees to attract investors. Greyscale Ethereum Trust is once again the leader in this space, alongside the Invesco Galaxy Ethereum ETF (QETH).
Ironically, the clear leader in the fee race is also a Grayscale product. Grayscale Ethereum Mini Trust (ETH), a new fund created specifically for listing as an ETF, has a management fee of just 0.15%. These fees will be completely waived for the first six months after listing or until the fund's assets under management (AUM) reaches $2 billion.
Another notable option is Franklin Templeton’s Franklin Ethereum ETF (EZET). Its management fee of 0.19% is the second lowest among similar funds , and those fees will be waived until January 2025 or until the fund reaches $10 billion in AUM.
Will the spot Ethereum ETF provide staking services?
The short answer is, “No.” The longer answer is, “Maybe, but not any time soon.”
To recap, staking involves depositing ETH into a validator node on the Ethereum beacon chain. Staked ETH earns a percentage of network fees and other rewards, but also risks being “slashed” — or having the staked collateral confiscated — if the validator misbehaves or fails.
Staking is attractive because it can significantly increase returns, which were around 3.7% annualized as of July 19, according to StakingRewards.com.
Earlier this year, several issuers, including Fidelity, BlackRock, and Franklin Templeton, sought regulatory approval to add staking capabilities to spot ETH ETFs. The SEC rejected those requests.
According to several unnamed negotiators who spoke to Cointelegraph, the issue comes down to liquidity. It usually takes several days for staked ETH to be withdrawn from the Beacon chain. This is a problem for issuers because they need to redeem ETF shares on demand in a timely manner to obtain the underlying fund assets.
Sources familiar with the matter told Cointelegraph that the issuer is still exploring ways to add staking capabilities to the existing ETH spot ETF — possibly by maintaining a “buffer” of liquid spot ETH — but a viable plan is at least a few months away. Currently, the ETH ETF cannot be staked.
