SEC Gives Grayscale, ProShares Approval to Launch ETH-ETF

SEC approved applications to launch Grayscale’s Ethereum-based mini-ETF and ProShares’ spot exchange-traded fund.

The US SEC has approved Grayscale’s mini Ethereum ETF, which will be seeded with assets currently backing the larger ETF. ProShares’ Ethereum ETF was also approved. The fund is likely to start trading next week along with other spot ETH ETF products. Grayscale also has a mini…

— Wu Blockchain (@WuBlockchain) July 18, 2024

The first instrument is based on the assets that support the larger ETF. The product is intended to complement the rest of the Ethereum-based lineup and support a wide range of investors.

Proshares has not yet specified the fee; Grayscale Ether Mini Trust charges 0.25%, while its older counterpart charges 2.5%.

Bloomberg’s James Seyffarth explained the company’s interest in registering a mini-fund as a way to soften the impact of a potential outflow of funds from ETHEThe latter is possible as a result of the transformation of a larger structure.

I think this means that the mini Ethereum ETF is going to launch at the same time as all the others. $ETH will seed with 10% of $ETHE‘s assets essentially off the bat. Should help alleviate some of the likely Grayscale outflows. Still don’t know fees on either though. https://t.co/kmHoHUS4em

— James Seyffart (@JSeyff) July 17, 2024

When will the bidding start?

The specialist predicted that Grayscale Ether Mini Trust and Proshares Ether ETF will begin trading along with other products next week.

Sources Decrypt and CoinDesk July 23 was cited as a benchmark, a view shared by Bloomberg analyst Eric Balchunas, “in the absence of unforeseen circumstances.”

On May 23, the Commission approved Form 19b-4s from ETH ETF issuers. The regulator is currently reviewing Form S-1 proposals.

In May, Grayscale Investments withdrew its application to create an Ethereum-based futures ETF.

CEO Michael Sonnenschein promised that the company would focus its efforts on converting ETHE into a spot exchange-traded fund. At the time, the top manager expressed confidence that the regulator would convert the Ethereum trust into an instrument.

Competitors’ actions

ETH ETF issuers disclose fee amounts in updated SEC deadline filings, writes The Block.

7 out of 10 funds use time-based fee discounts or AUM. Seven backers also chose Coinbase as their custodian.

Specifically, BlackRock set the fee at 0.25%. Over the course of a year or until the value of assets under management increases to $2.5 billion, the figure will be 0.12%.

For 21Shares, these parameters were 0.21% and 0%, respectively, until one of two conditions was met: six months after the start of trading or AUM exceeding $500 million.

Bitwise has similar terms, except for the base rate of 0.2%.

Invesco Galaxy, VanEck and Franklin Templeton had fees of 0.25%, 0.2% and 0.19%, respectively. Fidelity had a fee of 0.25%. Fees will not be charged until the end of 2024.

Franklin Templeton will waive the fee until January 31, 2025, for the first $10 billion, VanEck – for a year until it reaches $1.5 billion in assets.

Staking?

None of the above statements include staking. Hester Peirce of the SEC assured that “any product feature is always open to review.”

According to Balchunas, both staking and the option of repayment in kind, which is also not currently provided for in the proposals, will become real in the event of a change in the US president.

Variant General Counsel Jake Chervinsky said such innovations are a matter of time, not possibility.

Steno Research predicted a net inflow of $15-20 billion into future funds within a year and Ethereum growth to $6,500.

K33 Research estimates net inflows into products in the first five months after the start of trading at $3.1 billion to $4.8 billion.

Earlier, QCP Capital predicted that Ether would rise to $4,800 after the approval of the ETH-ETF. Experts believe that demand in the amount of 10-20% of receipts in bitcoin funds will trigger a positive movement.

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