After the successful entry of the Bitcoin ETF, the Ethereum exchange traded funds (ETF) began trading on Tuesday on the Chicago Board Options Exchange (CBOE).
The U.S. Securities and Exchange Commission has allowed registration forms from 21Shares, Bitwise, BlackRock, Fidelity, Franklin Templeton, VanEck and Invesco Galaxy to go effective as of Monday afternoon. Registration forms for the Grayscale Ethereum Trust and the Grayscale Ethereum Mini Trust also went effective on Monday.
The Ethereum ecosystem thrives on the innovative contributions of thousands of developers, each bringing unique ideas to blockchain technology, decentralized applications (dApps), and smart contracts. This collaborative effort drives Ethereum's ongoing evolution, positioning it as a decentralized powerhouse transforming industries and pioneering the future of digital finance.
Ethereum's appeal to traditional investors is established by its smart contract capabilities and extensive dApp ecosystem, which currently hosts over 4,000 applications and millions of smart contracts. The adoption of Layer 2 solutions within Ethereum is rapidly expanding, with the total value locked (TVL) in these networks soaring to a record $47 billion. Leading in the race is Arbitrum One, which holds approx $19 billion, followed by OP Mainnet and Base, each securing over $6 billion. Other networks like Blast, Mantle, Linea, and Starknet also boast TVLs more than $1 billion.
The introduction of ETFs is pivotal in attracting institutional investors, who bring substantial capital and long-term investment strategies that improve market stability. This trend mirrors the positive impact seen with Bitcoin ETFs, which amassed over $50 billion in investment across 10 newly launched funds within just five months of their launch.
Institutions that have already invested in Bitcoin ETFs are likely to expand their portfolios to include newly approved Ethereum ETFs. If these Ethereum ETFs perform as well as their Bitcoin counterparts, the influx of significant institutional investments alongside bullish speculative trading could propel ETH prices to unprecedented highs.
VanEck, a global investment firm, has projected optimism about the future potential of Ethereum Layer 2 networks. The firm has predicted that these networks could achieve a valuation surpassing $1 trillion by 2030, as reported by various media outlets.
Additionally, Institutional market data provider Kaiko has also claimed in a report that Ethereum will outdo Bitcoin following the launch of spot Ether ETFs.
Additionally, Ethereum's upcoming Pectra upgrade, slated for Q1 2025, is expected to be a significant advancement for the network. This upgrade is anticipated to reinforce Ethereum's leadership in decentralized applications (dApps) and smart contracts, which in turn will drive innovation across the broader blockchain industry.
With ETF and Bitcoin ETF’s success, even other crypto exchange traded funds might soon become a reality - especially a Solana-based ETF. Cryptocurrencies will not just remain as a speculative asset but become an important part of investment portfolios, which might further help in legitimizing the crypto space.