In Tuesday’s trading, cryptocurrency prices witnessed a decline, especially in the case of Ethereum, despite the US Securities and Exchange Commission’s approval to launch and start trading in exchange-traded funds. The price of Bitcoin fell by 2.20%, reaching $66,497.88, the value of Ethereum fell by 1.64%, reaching $3,432.16, and Ripple fell by 2.87%, reaching 59.87 cents.
However, today, Tuesday, the launch and trading of exchange-traded funds that invest directly in Ethereum, the second largest cryptocurrency in the world by market value, was approved by the US Securities and Exchange Commission. It is expected that trading in these funds will begin as of Tuesday. Yesterday, Monday, several fund issuers filed additional registration statements, and a notice was issued by the exchanges confirming that the funds would be traded on the specified day, indicating official approval from the SEC for this matter.
Some large companies are competing in launching Ethereum funds, and among these companies are BlackRock, Fidelity, and Vanic, which are large asset managers. For their part, some companies specializing in cryptocurrencies, such as BitWise, 21Shares, and Graycell, are focusing on converting their Ethereum funds, worth billions of dollars, into exchange-traded funds at different costs. These companies are also working to move forward in this area.
The Ethereum ETFs were launched approximately six months after the launch of the Bitcoin ETFs, which achieved notable success. More than $16 billion in net inflows were attracted to these funds, pushing the price of Bitcoin to a new record high above $70,000.
Investing in blockchain-related assets
However, the inflows are expected to be large by the standards of most ETF launches. The chief investment officer expected the funds to attract $15 billion during the first year and a half of their launch on the market. “If you think about an investor who doesn’t have a specific view — who only wants to invest in blockchain-related assets their starting point would be exposure to both bitcoin and ethereum,” Hogan said.
There are some funds in the market that are already using Ethereum futures, but these new funds will be the first in the United States to buy and hold Ether on the spot. Meanwhile, Bitcoin is recording $66,528, a decline of 1.16% in the last 24 hours. While Ethereum recorded a level of $3,453, declining by about 0.7%. He continued: “It will be interesting to watch how the Ethereum ETFs will perform in the first days of trading, compared to the initial performance of the Bitcoin ETFs in America.”
Ting explained that the reception of Bitcoin exchange-traded funds in the American markets was very positive. It recorded an inflow of $4.7 billion on the first day of trading. Bitcoin-traded funds in America enjoyed a total cumulative net inflow of more than $16.59 billion as of July 17. He continued: “It remains to be seen whether the investment funds traded in (Ethereum) will receive the same intensity of reception; But I am confident that this development will be hugely positive for the entire digital assets industry. He noted that these ETFs could serve as a gateway for investors who do not want to invest directly in digital currencies, and “over time, these investors may move to purchasing assets.” Directly, which contributes to the growth and maturity of the market
Launching the first trading funds for the Ethereum currency
Ether funds are expected to be less popular than Bitcoin funds, partly due to the size of the Ether market being about a quarter of the size of the Bitcoin market. This is because Bitcoin has received more recognition and attention from investors and the public in general, while Ether is considered a minor cryptocurrency and does not have the same level of fame and insight.
Data showed that Bitcoin exchange-traded funds attracted nearly $7 billion in assets in the first three weeks of trading. The value of these cash flows as of the end of July amounted to $33.1 billion. Investors do not expect that the value that Ethereum will collect from ETFs will come close to the cash flows that Bitcoin received during the first week of trading, given the smaller market value of Ethereum, which amounts to $424 billion, compared to $1.4 trillion. Dollar to Bitcoin
The CEO of Binance described the launch of the first trading funds for the Ethereum currency as a positive development for the digital assets market, and said in a statement that it will enhance the legitimacy and accessibility of cryptocurrencies. He stated in the statement, a copy of which was received by Asharq Al-Awsat, that traded investment funds will contribute to dispelling concerns related to the legitimacy of digital currencies and issues of regulatory compliance, security and accessibility, “which makes (Ethereum) a more attractive investment option.” The CEO of Binance expected that there would be fixed distributions of capital in crypto-traded funds. He continued, “The performance of these funds is unlikely to be dramatic at first, and will fluctuate based on various macroeconomic factors.” The liquidity of these ETFs is expected to grow significantly in the coming period.
