Wall Street braces for ether ETF launch this summer

Multiple applications have been filed for spot ether exchange-traded funds (ETFs) this year, reflecting growing interest in the new investment vehicles for the world's second-largest cryptocurrency.

Multiple applications have been filed for spot ether exchange-traded funds (ETFs) this year, reflecting growing interest in the new investment vehicles for the world's second-largest cryptocurrency.

The U.S. Securities and Exchange Commission (SEC) is expected to give full approval for ether ETFs this summer, allowing the new investment products to begin trading on Wall Street imminently, according to experts.

Companies looking to launch a spot ether ETF this summer include BlackRock, Fidelity, VanEck, Franklin Templeton, 21Shares, and Grayscale.

Grayscale, for example, plans to convert its existing ether trust into a spot ether ETF. The company, however, forecasts that the new investment vehicles might only draw up to a third of the interest that bitcoin ETFs have.

Already, bitcoin ETFs have attracted approximately $38 billion, Morningstar Direct data shows. Ether ETFs are unlikely to garner the same level of market exuberance.

Given the relatively limited availability of ether in circulation, however, any significant inflows into ETFs could possibly wield a more pronounced impact on its price compared to bitcoin. In fact, the tighter supply of ether may amplify the effect of increased demand from ETF investments on the token's value.

"Ethereum has roughly half the level of spot liquidity [compared to bitcoin]," Thomas Perfumo, head of strategy at crypto exchange Kraken, recently told Reuters. "Half the amount of liquidity means that you need less amount of absolute dollars coming into the market to make the same price impact on Ethereum."

In the crypto industry, there is also ongoing hope that investors won't have to wait much longer for ether ETFs to begin trading after final SEC approvals. "[I] will be shocked if spot ETFs [are] not trading [within the] next 2 weeks," Nate Geraci, co-founder of The ETF Institute, told media. "Later next week [is] a possibility, but think [the] week of July 15th [is] more likely. Interestingly, [the] price of [ether is down] 20%+ since the ‘surprise’ 19b-4 approvals in late May," he said.