Ethereum
ETHE) Begins Trading on NYSE Arca as a Spot Ethereum ETP
Grayscale Investments
Grayscale Investments®’s new ETPs have launched on NYSE Arca under the symbols “ETH” and “ETHE”
STAMFORD, Conn., July 23, 2024 (GLOBE NEWSWIRE) — Grayscale Investments®the world’s largest crypto asset manager*, offering over 20 crypto investment products, today announced that Grayscale Ethereum Trust (Ticker: ETHE) and Grayscale Ethereum Mini Trust (Ticker: ETH) have begun trading on NYSE Arca starting at 4:00 a.m. ET today as Ethereum spot ETPs following recent regulatory approval by the U.S. Securities and Exchange Commission (SEC). The launch and commencement of trading for ETH and ETHE represents a groundbreaking achievement for Grayscale’s clients and the broader Ethereum community.
Grayscale Ethereum Mini Trust (“ETH”) and Grayscale Ethereum Trust (“ETHE”) are not registered funds under the Investment Company Act of 1940 and are not subject to regulation under the Investment Company Act of 1940, unlike most mutual funds or ETFs. Investing involves substantial risks, including possible loss of principal. Trusts may not be suitable for all investors.
ETHE has become the largest spot Ethereum ETP with $9.19 billion in AUM as of July 23, 2024, and has come to market with an established and diversified investor base across retail and institutional investors.
ETH launched today as a low-fee spot Ethereum ETP** through the innovative seeding mechanics by distributing 10% of ETHE’s underlying Ethereum. As such, ETH began trading as the second-largest spot Ethereum ETP*, with a uniquely diversified investor base and $1.02 billion in assets under management as of July 22, 2024. The ETHE distribution event is colloquially known as a “spin-off” and is a corporate action that is not expected to be a taxable event for ETHE or any beneficial owner of ETHE shares as of the transaction date. previously announced Record date of July 18, 2024. Investors are encouraged to consult a tax advisor for related tax advice.
“The Grayscale team couldn’t be more excited that ETH and ETHE will begin trading today as Ethereum Spot ETPs on NYSE Arca,” said David LaValle, Senior Managing Director and Global Head of ETFs at Grayscale. “Ethereum Spot ETPs will provide U.S. investors, financial professionals, and asset allocators with reliable and convenient access to Ethereum for the first time in the familiar and proven ETP wrapper. This is a significant milestone for investors and the ETF market, and demonstrates Grayscale’s continued commitment to advancing digital asset investing in the U.S..”
Grayscale remains committed to meeting the growing investor and market demand for Ether by expanding its suite of Ethereum-focused investment products – aiming to create a suite of products that can meet the unique needs of investors at every stage of their Ether investment journey. Grayscale has been and remains resolutely focused on working constructively with its investors, partners, regulators and policymakers to help deepen the understanding of Ethereum and the Ethereum Fee Protocol to broaden familiar access to the second-largest crypto asset by market cap***.
The story continues
“ETH and ETHE will enable investors to invest in Ethereum’s potential to create markets, transform financial systems, leverage decentralized finance (DeFi), and drive innovation through the trusted ETP wrapper – without the need to purchase, store, or manage Ethereum directly,” said John Hoffman, Grayscale’s Managing Director and Head of Distribution and Strategic Partnerships. “Client demand is growing as the crypto asset class matures, and Grayscale is proud to deliver pioneering financial products that provide our clients with choice when considering convenient, registered exposure to crypto assets, like Ethereum.”
For more information about ETH, please visit: https://etfs.grayscale.com/eth For more information about ETHE, please visit: https://etfs.grayscale.com/ethe.
*By AUM as of July 22, 2024
**Low cost based on a 0% gross expense ratio for the first six months of trading on the first $2.0 billion. Once the fund reaches $2.0 billion in assets or after a 6-month waiver period, the fee will be 0.15%. Brokerage and other charges may still apply. See the prospectus for additional information on fee waiver.
*** By market capitalization as of July 22, 2024
NO OFFER OR SOLICITATION
This communication is for informational purposes only, in your capacity as an ETHE shareholder, and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No shareholder approval of the distribution is required by applicable law, and we are not seeking approval of ETHE shareholders.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
A definitive information statement on Schedule 14C will be provided to ETHE shareholders for the purpose of informing ETHE shareholders of the distribution, in substantial compliance with Regulation 14C under the Exchange Act. The information statement will describe the Grayscale Ethereum Mini Trust, the risks associated with holding shares of the Grayscale Ethereum Mini Trust and other details regarding the distribution, and will be made available on our website at www.grayscale.com/documents#regulatoryfilings. ETHE shareholders will not need to pay any consideration, exchange or dispose of existing ETHE shares, or take any other action to receive shares of the Grayscale Ethereum Mini Trust in connection with the distribution.
Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Mini Trust (ETH) (collectively, the “Trusts”) have filed registration statements (including a prospectus) with the SEC for the offering to which this communication relates. Before investing, you should read the prospectuses in the registration statements and other documents the Trusts have filed with the SEC for more complete information about the Trusts and this offering. You may obtain these documents free of charge by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, the Trusts or any authorized participant will arrange to send you the prospectus (when available) if you request it by calling (833) 903-2211 or by contacting Foreside Fund Services, LLC, Three Canal Plaza, Suite 100, Portland, Maine 04101. Foreside Fund Services, LLC is the marketing agent for the Trusts.
Investing involves significant risks, including possible loss of principal. The Trust holds Ethereum; however, an investment in the Trust does not constitute a direct investment in Ethereum. There is no certainty that an active trading market for the shares will develop or be sustained, which would adversely affect the liquidity of the Trust’s shares.
Grayscale Ethereum Trust and Grayscale Ethereum Mini Trust Risk Disclosure:
An investment in the Grayscale Ethereum Trust or the Grayscale Ethereum Mini Trust may be considered speculative and is not intended to be a complete investment program. An investment in ETHE or the Grayscale Ethereum Mini Trust should be considered by individuals who are financially capable of maintaining their investment and who can bear the risk of total loss associated with an investment in ETHE or the Grayscale Ethereum Mini Trust. The extreme volatility in trading prices that many digital assets, including Ethereum, have experienced in recent periods and may continue to experience could have a material adverse effect on the value of ETHE and the Grayscale Ethereum Mini Trust and the shares could lose all or substantially all of their value. Digital assets represent a new and rapidly evolving industry. The value of ETHE and the Grayscale Ethereum Mini Trust depends on the acceptance of digital assets, the capabilities and development of blockchain technologies, and the fundamental investment characteristics of the digital asset. Digital asset networks are developed by a diverse set of contributors and the perception that certain high-profile contributors will no longer contribute to the network could have a negative effect on the market price of the relevant digital asset. Digital assets may be held by concentrated owners and significant sales or distributions by holders of such digital assets could have a negative effect on the market price of such digital assets. The value of ETHE and ETH is directly linked to the value of the underlying digital asset, the value of which can be highly volatile and subject to fluctuations due to a number of factors.
A registration statement relating to Grayscale Ethereum Mini Trust has been filed with the SEC but has not yet become effective. No investment in the Grayscale Ethereum Mini Trust may be made, nor money accepted, until the registration statement becomes effective. An investor should carefully consider the investment objectives, risks, and charges and expenses of the Grayscale Ethereum Mini Trust before investing. A preliminary prospectus containing this and other information about Grayscale Ethereum Mini Trust may be obtained by sending an email to info@grayscale.comThe information contained in the preliminary prospectus is not complete and is subject to change. The final prospectus should be read carefully before investing and, when available, may be obtained from the same source. This communication does not constitute an offer to sell shares or a solicitation of an offer to buy shares in any state in which the offer or sale is not authorized.
Grayscale Investments, LLC is the sponsor of the Grayscale Ethereum Trust and the Grayscale Ethereum Mini Trust.
About Grayscale Investments®
Grayscale empowers investors to access the digital economy through a suite of forward-thinking investment products. Founded in 2013, Grayscale has a proven track record and deep expertise as the world’s largest crypto asset manager. Investors, advisors and allocators turn to Grayscale’s private placements, public offerings and ETPs for single-asset, diversified and thematic exposure. Grayscale products are distributed by Grayscale Securities, LLC (member FINRA/SIPC).
Media Contact
Jennifer Rosenthal
press@grayscale.com
Ethereum
Crypto Token Ether (ETH) Rebounds Following Complaint About SEC Investigation Into Ethereum
The Ether token posted its best gain this week amid speculation that U.S. regulatory oversight of the blockchain ecosystem underlying the second-largest digital asset could ease.
The token climbed as much as 3.6% on Wednesday before paring some of its advance to trade at $3,562 as of 12:53 p.m. in Singapore. The rally was a modest tailwind for market leader Bitcoin and a string of smaller rivals.
The launch of Ethereum spot exchange traded funds Exchange traded funds (ETFs) attracted significant market interest on July 23, with initial inflows surpassing $100 million. This is a notable change from the previous four days of outflows for U.S. spot Ether ETFs, which saw a total of $33.67 million in new investments.
This figure was, however, partly offset by an outflow of $120.28 million from Grayscale’s Ethereum Trust (ETHE). However, many crypto analysts believe that the Ethereum ETF will soon follow bitcoin’s path.
Ethereum ETF to Track Bitcoin
Katalin Tischhauser, head of investment research at Sygnum Bank and a former Goldman Sachs executive, predicted that Spot Ether exchange-traded funds could attract as much as $10 billion in assets under management in their first year.
She also predicted that Bitcoin ETFs could see inflows of $30 billion to $50 billion in their first 12 months, with Ethereum products likely following the same path.
Tischhauser noted that investing in Ethereum offers distinct advantages over Bitcoin. While Bitcoin is primarily viewed as a store of value, Ethereum’s value comes from revenue and cash flow. This makes Ether more relevant to traditional institutional investors compared to the perception of Bitcoin as “digital gold.”
Fee waivers to attract institutional investors
To attract institutional investors, several ETF issuers are waiving fees for their Ethereum spot funds. Franklin Templeton announced a 0.19% sponsorship fee, but will waive it for the first $10 billion in assets for six months. Meanwhile, Bitwise and VanEck will charge a 0.20% fee through 2025.
BlackRock revised its registration statement for its spot Ethereum ETF, ETHA, to include a 0.25% management fee. Grayscale launched its Grayscale Ethereum Mini Trust with the same 0.25% fee.
Ethereum ETFs Exclude Staking
The enthusiasm is, however, tempered by the lack of staking rewards of these ETFs. In May, BlackRock, Grayscale and Bitwise removed staking provisions from their SEC filings after discussions with the SEC.
As traditional investment institutions are limited by regulations and legal constraints, they can only invest through ETFs, without resorting to staking.
Also see: Crypto News Today: Bitcoin, Ethereum Brace for Volatility as Fed Holds Rates
It sounded like an almost certain rejection from the Securities and Exchange Commissionbut just hours before the May 23 deadline to rule on VanEck’s application to launch an Ethereum spot exchange traded fundIt appears that the SEC may reconsider its decision.
CoinDesk First reported On Monday, the nine potential issuers that had filed to list and trade the ETFs were “abruptly” asked by regulators to update their 19b-4 filings on an expedited basis. A 19b-4 is what an exchange like the NYSE requires for new product introductions — in other words, the applicants and the exchange ask the SEC for permission to add the ETFs to their platforms.
Since rumors began circulating Monday afternoon, the price of Ether has climbed nearly 20%, trading near $3,750 as of 1:30 p.m. ET Tuesday.
It’s hard to believe that the SEC would do us a favor by approving the ETH spot ETF.
But politics is politics, and crypto has been winning the political battle for months.
Perhaps the Biden camp saw how many voters Trump could win over with a single pro-crypto comment and decided to change course.
— Jake Chervinsky (@jchervinsky) May 21, 2024
Since VanEck is the first exchange to file, its approval could hypothetically be a green light for others waiting to hear about their own 19b-4s. While rumors began circulating Monday that applications were being worked on, Bloomberg analysts updated their ratings from 25% to 75% approval.
But the news left issuers scratching their heads. Every issuer Bloomberg ETF analyst James Seyffart spoke to was “caught off guard by the SEC’s 180-degree turn,” he told Fortune. The agency reached out to filers for comment and updates just three days before the deadline, he said.
“This is not standard operating procedure, and everyone from issuers to exchanges to lawyers to market makers and more are scrambling to be ready for eventual approval and to meet SEC requirements,” Seyffart adds. The hasty nature of the pivot suggests it was likely a “political move,” the result of a “top-down decision” by the Biden administration, he speculates. “No issuer is ready,” he wrote on X.
It’s hard to believe that the SEC would do us a favor by approving the ETH spot ETF.
But politics is politics, and crypto has been winning the political battle for months.
Perhaps the Biden camp saw how many voters Trump could win over with a single pro-crypto comment and decided to change course.
— Jake Chervinsky (@jchervinsky) May 21, 2024
So far, Grayscale is the only potential issuer to post an update 19b-4 to the New York Stock Exchange website, for its application to transfer its Ethereum Mini Trust ETF. Meanwhile, Fidelity has abandoned its plan to put Ether in its ETF, according to a S-1 Update The filing was made with the SEC early Tuesday. In previous filings, the company had said it intended to “stake a portion of the trust assets” to “one or more” infrastructure providers, but now it “will not stake Ether” stored with the custodian.
Staking involves committing Ether to secure the network in exchange for a yield, which is currently around 3%, according to data from staking service Lido. Ark and Franklin Templeton have also considered staking in their applications. In today’s 19b-4 update from Grayscale, the company confirmed that it would not participate in staking. The fact that Grayscale highlighted this and Fidelity omitted it suggests that the SEC may have asked that staking be banned. Vance Spencer, co-founder of Business executivestold Fortune he believed the SEC’s last-minute requests included advice on staking.
Staking the underlying Ether in the ETF has been seen as a reason the SEC could reject the applications, with Chairman Gary Gensler expressing concern in March that digital assets using staking protocols could be considered securities under federal law. Staking could be “a significant complication,” Bitwise CIO Matt Hougan said. previously said Fortune.
However, even if the SEC approves VanEck’s 19b-4 on Thursday, it doesn’t guarantee clearance, as exchanges will need S-1 filings from issuers before the products can begin trading. When filing to launch a new security, an S-1 is the form that describes to potential investors and the SEC the structure of the asset, how it will be managed and, in this case, how it plans to mirror the performance of the underlying asset, namely Ether tokens.
But S-1 projects could take “weeks, if not months” to be approved, Seyffart said. written on X“That said, if we are correct and see these theoretical approvals later this week, that should mean that S-1 approvals are a matter of ‘when’ and not ‘if.’”
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Fuente
After Federal Reserve Chairman Jerome Powell said a September rate cut “could be on the cards,” stocks soared to session highs. The tech-heavy Nasdaq 100 climbed 3.3% and the S&P 500 climbed 2%. However, the king cryptocurrency Bitcoin (BTC) fell 1.3% to $66,088, and Ethereum (ETH) fell about 1.11% to $3,313. Over the past 24 hours, the global cryptocurrency market cap also fell 0.71% to $2.39 trillion.
However, market analysts believe that this is a short-term decline, as Bitcoin and other cryptocurrencies, despite being in a bearish situation, are showing bullish signals. Although BTC is still struggling to break the $70,000 mark, it will be interesting to see how BTC will react in August before the rate cuts.
Federal Reserve Decision
On July 31, the U.S. Federal Reserve concluded a two-day meeting of the Federal Open Market Committee (FOMC) by choosing to keep benchmark interest rates unchanged at 5.25%-5.50%, in line with Wall Street expectations. The decision marked the eighth consecutive meeting without a rate change.
Towards a market rebound?
According to SantimentThe FOMC’s decision to maintain current interest rates led to an initial decline in cryptocurrency prices. Traders were hoping for a rate cut, which hasn’t happened since March 2020. A future rate cut could signal bullish trends for stocks and cryptocurrencies, potentially boosting markets for the remainder of 2024. Despite the initial sell-off, markets are likely to stabilize unless another major event impacts the cryptocurrency sector.
In the meantime, aggressive accumulation by bulls and increasing negative sentiment among the crowd could set the stage for a substantial market rebound.
Understanding the broader impact
Despite the anticipation surrounding the FOMC meeting, the impact on cryptocurrencies was limited as the pause on rates had already been factored into prices. Previous Fed decisions have shown minimal major impact on Bitcoin prices.
Historically, FOMC actions affect all asset classes. In 2020 and 2021, Bitcoin and other altcoins soared when the Fed cut rates to zero, only to reverse course in 2022 when rates began to rise. Investors moved trillions of dollars into lower-risk assets, with money market funds amassing over $6.1 trillion, earning an average return of 5%.
Furthermore, Bitcoin’s immediate resistance is noted at $66,852, with support at $65,000. The RSI is signaling oversold conditions, suggesting further declines are possible if the price falls below $65,900.
Investors are now closely watching the FOMC meeting for clues about inflation and economic growth, which could influence Bitcoin’s next move.
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