Ethereum Spot ETF Approved: A New Era for Crypto Markets

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On July 23, the U.S. Securities and Exchange Commission (SEC) officially approved the S-1 filings from multiple ETF issuers, marking the formal green light for spot Ethereum (ETH) ETFs to begin trading. Initial trading is expected to commence the following day—Tuesday in U.S. time, which corresponds to Tuesday evening in Beijing time.

This milestone decision affects eight companies that had applied to launch the first wave of spot Ethereum ETFs in the United States. At least two of them, including industry giants BlackRock and VanEck, have been notified by the SEC that their products can begin trading. These ETFs will be listed across three major exchanges: the Chicago Board Options Exchange (CBOE), Nasdaq, and the New York Stock Exchange (NYSE), all of which have confirmed their readiness for launch.

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A Landmark Moment for the Crypto Industry

The approval of spot Ethereum ETFs represents a pivotal advancement in the maturation of digital assets. Following the SEC’s earlier January 2025 approval of spot Bitcoin ETFs, this latest development underscores growing regulatory acceptance and sustained innovation within the cryptocurrency ecosystem.

Coinbase, a leading cryptocurrency exchange, hailed the decision as another critical milestone. As both a trusted partner and custodian for 10 spot Bitcoin ETFs and eight newly approved spot Ethereum ETFs, Coinbase plays a central role in bridging traditional finance with blockchain-based assets.

According to Eric Balchunas, senior ETF analyst at Bloomberg, Jay Jacobs—BlackRock’s head of thematic and active ETFs—emphasized Ethereum’s utility over scarcity. In a recent video, Jacobs described Ethereum as “a global platform for applications that operate without centralized intermediaries,” highlighting its foundational role in decentralized finance (DeFi), non-fungible tokens (NFTs), and smart contracts.

Why Ethereum ETFs May See Slower Inflows Than Bitcoin

Despite the enthusiasm, some analysts project more modest capital inflows for Ethereum ETFs compared to their Bitcoin counterparts. Farside Investors, a London-based asset management firm, outlined several key reasons:

Wintermute, a leading crypto market maker, forecasts up to $4 billion in investor inflows into Ethereum ETFs over the next 12 months. This could drive ETH prices up by as much as 24% within the same period.

At the time of writing, Ethereum was trading at $3,445, down 2.5% over 24 hours—a sign that much of the positive sentiment may have already been priced in ahead of the official announcement.

A Decade in the Making: From ICO to Institutional Acceptance

July 22, 2014—exactly ten years before this approval—marked the launch of Ethereum’s initial coin offering (ICO). During that fundraising campaign, the team raised 31,529 BTC through a presale of ETH tokens at an exchange rate of 1 BTC for 2,000 ETH. Based on prices at the time, this amounted to over $18 million in capital.

Fast forward to today: what once began as a grassroots project has evolved into a cornerstone of Web3 infrastructure, now backed by institutional-grade financial products.

Just two months prior to approval, sentiment around Ethereum ETFs shifted dramatically—from a mere 7% chance of passage to a projected 75%. On May 24, the SEC approved the 19b-4 filings for several spot Ethereum ETFs, including those from BlackRock, Fidelity, and Grayscale—clearing a major regulatory hurdle.

Overcoming Regulatory Hurdles: Security Concerns and PoS Debate

Unlike Bitcoin, Ethereum faced unique challenges on its path to ETF approval—primarily due to concerns over its classification as a security.

Because Ethereum conducted an ICO in 2014—a form of fundraising that resembles traditional securities offerings—regulators questioned whether ETH should be classified as a security rather than a commodity. Additionally, Ethereum’s lack of a hard supply cap and its transition to Proof-of-Stake (PoS) in September 2022 raised further scrutiny.

Under PoS, validators earn rewards for securing the network, creating an income stream that resembles dividend-paying securities. Moreover, data from Glassnode shows that approximately 55% of all ETH is held by just 1,009 addresses—raising concerns about market concentration and potential manipulation.

To address these issues, all approved ETF providers—including Ark Invest, 21Shares, and BlackRock—have explicitly excluded staking from their fund structures. By doing so, they reduce the likelihood of ETH being deemed a security, since staking introduces expectations of profit derived from others’ efforts—a key criterion under U.S. securities law.

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Hong Kong’s Early Move: Setting Precedent for Global Markets

Interestingly, Hong Kong beat the U.S. in launching spot Ethereum ETFs. On April 15, 2025, the Securities and Futures Commission (SFC) of Hong Kong approved a slate of spot crypto ETFs from华夏 (CSOP), Harvest Fund International, and Bosera Asset Management.

These six products—including both Bitcoin and Ethereum ETFs—began pre-listing subscriptions on April 25–26 and officially listed on April 30 on the Hong Kong Stock Exchange. Notable tickers include:

Analysts attribute Hong Kong’s faster approval process to its flexible regulatory framework, strategic ambition to become a digital asset hub, and strong market demand. Some even view this early adoption as a “lifeline” for Ethereum’s broader market momentum.

What Does This Mean for Crypto Markets?

Price Impact and Institutional Demand

While Bitcoin surged nearly 75% in the six months following its spot ETF approval, Ethereum’s price reaction has been more muted initially. However, long-term projections remain bullish.

Geoff Kendrick, Head of FX and Digital Asset Research at Standard Chartered Bank, estimates that spot Ethereum ETFs could attract between 2.39 million and 9.15 million ETH in the first year—equivalent to $15 billion to $45 billion in assets under management.

If these inflows materialize and align with broader macro trends—including potential Bitcoin price targets of $150,000 by end-of-year—Kendrick projects Ethereum could reach **$8,000**.

Ripple Effect on Altcoins

Ethereum’s rise could also catalyze gains across the broader altcoin market. Since most decentralized exchanges (DEXs) use ETH as the primary trading pair, increased demand for Ethereum often leads to passive price appreciation for smaller cryptocurrencies built on its network.

Moreover, the approval sets a powerful precedent. If Ethereum—a platform with complex economic mechanics and governance features—can gain regulatory approval for an ETF, other major cryptocurrencies may follow.

Shifting Regulatory Landscape in the U.S.

The approval signals a notable shift in U.S. crypto policy. With national elections underway and both Democratic and Republican parties showing increasing support for digital assets, legislative momentum is building.

Notably, former House Speaker Nancy Pelosi is reportedly considering backing the FIT21 crypto bill—a bipartisan effort aimed at clarifying regulatory jurisdiction between the SEC and CFTC.

Alex Thorn of Galaxy Digital notes that regulators may now adopt a nuanced stance: treating ETH itself as a commodity, while potentially classifying staked ETH or staking-as-a-service offerings as securities. This distinction mirrors proposals in FIT21 and could pave the way for clearer rules across the industry.

Frequently Asked Questions

Q: What is a spot Ethereum ETF?
A: A spot Ethereum ETF holds actual ETH tokens and tracks their real-time market price. Unlike futures-based ETFs, it provides direct exposure to physical cryptocurrency without derivatives.

Q: Why did it take longer for Ethereum ETFs to be approved than Bitcoin ETFs?
A: Due to concerns over Ethereum’s ICO history, staking rewards resembling dividends, and higher concentration of holdings, regulators viewed ETH as potentially falling under securities laws—making approval more complex.

Q: Can I earn staking rewards through these new ETFs?
A: No. To comply with SEC regulations and avoid classification as securities, all approved spot Ethereum ETFs currently exclude staking functionality.

Q: How might this affect Ethereum’s price?
A: Analysts project significant institutional inflows—potentially pushing ETH toward $8,000 within 12–18 months—if adoption follows patterns seen with Bitcoin ETFs.

Q: Are these ETFs available outside the U.S.?
A: While the U.S. has now approved them, other regions like Hong Kong launched similar products earlier in 2025. Availability depends on local regulatory frameworks.

Q: Will other altcoins get ETFs now?
A: While not guaranteed, Ethereum’s approval strengthens the case for future ETF applications from other large-cap cryptocurrencies like Solana or Cardano—especially if they can demonstrate decentralization and non-security status.

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