The potential launch of spot Ether ETFs has generated excitement in the crypto world, following the successful launch of spot Bitcoin ETFs earlier this year. The US SEC Chair, Gary Gensler, expects these ETFs to be available as early as September. This article delves into the details of S-1 filings by potential ETF issuers, revealing insights into the structure and potential challenges of these products.
Key takeaways from the S-1 filings include:
- Concentration in custodians: Most issuers have chosen Coinbase as their custodian, which could lead to concentration issues and potential conflicts of interest.
- Creation/redemption baskets vary: Issuers like iShares, Fidelity, and VanEck will issue and redeem shares in larger blocks, while others will use smaller baskets.
- Fees are TBD: Fees have not yet been disclosed, but are likely to be competitive.
- Risk factors are extensive: S-1 filings contain detailed risk factors, but many are standard disclosures related to volatile markets, lack of demand, and new asset classes.
- Staking and airdrops are not included: Investors in spot Ether ETFs will not benefit from staking or airdropped assets.
- Ark has dropped out of the race: Despite being a vocal player in the crypto ETF world, Ark has pulled out of its spot Ether ETF filing, citing potential limitations.
- ProShares joins the fray: ProShares, known for crypto futures ETFs, has filed to launch a spot Ether ETF.
Overall, the article suggests that the SEC is likely to approve spot Ether ETFs, but there are still some uncertainties about the specifics of these products. Investors should consider the pros and cons of investing in an ETF versus directly holding Ether.
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