Ether ETFs set to launch on Tuesday, following six-month debut of bitcoin funds

The U.S. Securities and Exchange Commission has apparently given the green light for exchange-traded funds (ETFs) that hold ether, the world’s second-largest cryptocurrency. It is anticipated that trading will commence as early as Tuesday.

On Monday afternoon, several fund issuers submitted additional registration statements, and exchanges have provided notice that the funds will be traded on Tuesday, implying that the SEC has approved the funds.

The SEC did not provide an immediate response to CNBC’s request for comment on Monday. In May, it approved rule changes for exchanges to list ether funds.

Various companies, including major asset managers like BlackRock, Fidelity, and VanEck, have been competing to launch ether funds. Additionally, crypto-focused firms such as Bitwise, 21Shares, and Grayscale are also entering the fray. Grayscale is converting its multibillion-dollar Ethereum Trust into two ETFs with varying fee structures.

The introduction of ether ETFs follows the launch of bitcoin ETFs about six months ago, which experienced highly successful debuts in the industry. Collectively, these funds have attracted over $16 billion in net inflows, with the iShares Bitcoin Trust (IBIT) leading the way, according to FactSet.

Although the ether funds are not expected to garner as much popularity as the bitcoin funds, primarily due to the smaller size of the ether market compared to other leading cryptocurrencies, they are projected to be substantial by typical ETF launch standards. Bitwise’s Chief Investment Officer, Matt Hougan, has forecasted that the funds could amass $15 billion in the first eighteen months of being on the market, with many investors opting for both bitcoin and ether funds.

Hougan highlighted, “If you think about an investor who doesn’t have a specific view — who just wants exposure to what blockchains can do — their starting point would be to have exposure to both bitcoin and eth.”

While there are existing funds in the market that utilize ether futures contracts, these new funds will be the first in the U.S. to purchase and retain spot ether.