ETFs backed by Spot Ethereum: An explanation
U.S. Securities and Exchange Commission Approves Spot Ethereum ETFs
In a significant move for the cryptocurrency industry, the U.S. Securities and Exchange Commission (SEC) approved spot Ethereum ETFs in May 2024. These ETFs started trading officially on July 23, 2024.
The approval included proposals from major asset managers such as BlackRock, VanEck, ARK 21Shares, Grayscale, Fidelity, Invesco, Galaxy Digital, and Franklin Templeton. As of August 2025, these Ethereum ETFs are actively trading on major U.S. exchanges.
Key Points
- All these firms have launched their approved spot Ethereum ETFs, with Grayscale and BlackRock holding the largest shares of Ethereum among these. Grayscale holds around 1.22 million ETH (42.11%), while BlackRock holds 1.20 million ETH (41.41%) as of mid-2025.
- Other ETFs by Fidelity, VanEck, ARK 21Shares, Franklin Templeton, and Invesco hold smaller portions of Ethereum, collectively adding to nearly 3 million ETH under ETF management.
- These ETFs have attracted substantial institutional investments, with significant inflows reported at least as recently as August 2025. For example, on August 14, 2025, BlackRock’s ETHA ETF led with over $519 million in net inflows, followed by inflows into Grayscale’s and Fidelity’s ETFs.
- Currently, these Ethereum ETFs do not support staking (earning rewards by validating the ETH network), but analysts expect the SEC to approve staking within Ethereum ETFs by late 2025 or early 2026, which could further boost their attractiveness.
- Ethereum's price and institutional interest have been positively impacted by the ETF approval, with notable price rallies and increased demand from regulated investment products.
Notable Developments
- Coinbase met with the SEC to present Grayscale's proposal for a spot Ethereum ETF.
- Standard Chartered predicted that the price of Ether would reach US$4,000 by the approval deadline of May 23, a price it has surpassed.
- On May 20, the SEC asked the Nasdaq, CBOE, and NYSE to update their 19b-4 filings for the ETH ETF applications "on an accelerated basis."
- Issuers updated their filings to confirm they will not stake ETH for yield to address SEC concerns surrounding the complexities of cryptocurrency staking.
- VanEck handed in an amended version of its S-1 forms to the SEC right after approval, with BlackRock doing the same on May 29.
- Analysts at Standard Chartered have predicted that Ether will likely not experience the immense selloffs that Bitcoin experienced in January.
- Eric Balchunas and James Seyffart increased their odds of VanEck's 19b-4 form being approved from 25 percent to 75 percent following the SEC’s request for updated filings.
Coinbase Partnership
In a bid to ensure transparency and regulatory compliance, Coinbase partnered with the Chicago Mercantile Exchange to closely monitor trading activities for fraud and manipulation. The exchange agreed to share information to maintain regulatory compliance.
As of 7:23 p.m. EDT on May 30, Ethereum was valued at US$3,749 per ETH. The impending launch of spot Ether ETFs is closely watched by investors and market observers, who are eager to see how these ETFs might influence the future growth and mainstream adoption of Ethereum.
[1] CoinDesk (2024). SEC Approves Spot Ethereum ETFs. [online] Available at: https://www.coindesk.com/business/2024/05/23/sec-approves-spot-ethereum-etfs/
[2] Cointelegraph (2024). SEC Approves Spot Ethereum ETFs: What You Need to Know. [online] Available at: https://cointelegraph.com/news/sec-approves-spot-ethereum-etfs-what-you-need-to-know
[3] Bloomberg (2024). Ethereum ETFs Begin Trading After SEC Approval. [online] Available at: https://www.bloomberg.com/news/articles/2024-07-23/ethereum-etfs-begin-trading-after-sec-approval
[4] CoinShares (2025). Ethereum ETFs Holdings and Assets Under Management. [online] Available at: https://www.coinshares.com/research/etf-research/ethereum-etfs-holdings-and-assets-under-management/
[5] CoinDesk (2025). Ethereum ETFs Attract Substantial Institutional Investments. [online] Available at: https://www.coindesk.com/business/2025/08/16/ethereum-etfs-attract-substantial-institutional-investments/
- Institutional investors have shown increased interest in blockchain investing, as evidenced by the substantial inflows into Ethereum ETFs offered by Grayscale, BlackRock, Fidelity, VanEck, ARK 21Shares, Franklin Templeton, and Invesco.
- As the cryptocurrency industry evolves, finance professionals are closely monitoring investments like Ethereum ETFs, anticipating potential developments such as the SEC's approval of staking within Ethereum ETFs, which could further boost their attractiveness.
