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What Your Traders Should Know About the Ethereum ETF Approval

Written by Acuity Trading | Jul 29, 2024 7:00:00 AM

Close on the heels of the approval and launch of Bitcoin ETFs in January 2024, the US SEC has approved eight Ethereum exchange traded funds (ETFs) for listing and trading on SEC-regulated exchanges.

The ETH ETFs approved are:

  • Grayscale Ethereum Trust
  • Bitwise Ethereum ETF
  • iShares Ethereum Trust
  • VanEck Ethereum Trust
  • ARK 21Shares Ethereum ETF
  • Invesco Galaxy Ethereum ETF
  • Fidelity Ethereum Fund
  • Franklin Ethereum ETF

Consequently, speculations regarding other alt coins also launching their own ETFs, such as Dogecoin, Solana and Cardano, have intensified.

We’ll look at how you can support your traders to capture trading opportunities during the launch of Etherium ETFs.

Growing Acceptance of Crypto
 
Crypto traders are already aware of the legal battle between Grayscale Investments and the US SEC, which led to the approval of Bitcoin ETFs. Now, the SEC has approved spot Ethereum ETF trading on public exchanges with significantly lower resistance.
 
This underlines the broader mindset shift towards cryptocurrencies in the mainstream markets. The deviation from enforcing regulations to limit crypto exposure to supporting investor freedom indicates more opportunities for traders in the digital currency segment.
 
Cryptocurrencies are too decentralised to be treated as securities. The blockchain-based assets are progressing towards being accepted as commodities in the global financial ecosystem, inviting innovative investment. This is set to bolster investor confidence in the nascent market and encourage traders to explore digital assets.
 
When Will the ETH EFTs Begin Trading?
 
The first thing your traders need to know is when they can start speculating on these ETFs. While NYSE Arca will launch the trading of the approved ETFs, it can only do so after the S-1 filings of the ETFs receive comments.
 
This is because the SEC has given only preliminary approval and ordered Grayscale and ProShares to fix some minor issues and re-file. Once the re-filed S-1 forms receive comments and approvals from the SEC, only then can trading commence.
 
While it is widely expected to be unlikely, there could be more rounds of comments and re-filings till the SEC is completely satisfied. Add Acuity’s NewsIQ to your trader toolkits to keep your clients informed of the latest updates and their impact on the cryptocurrency markets. The tool monitors news across mainstream and alternate sources to bring consolidated and reliable information straight to your traders’ inboxes.
 
ETH ETFs May Create More Significant Trading Opportunities
 
Here’s why:
 
  • The inflation rate of Ethereum is very low. Despite being the second most popular crypto and the foundation for numerous applications, coins minted per day are still low.
  • Trading and Staking ETH is much cheaper, which means significantly lower direct costs of gaining exposure to this cryptocurrency.
  • Over a quarter of ETH coins in existence are locked in staking, leaving a considerably lower number free for trading.

All these indicate that the impact of ETH ETF approval on the price of the coin will be more pronounced than that of BTC ETF approval, although it will be slower to be absorbed into the markets. The cryptocurrency will continue to create tremendous opportunities, which you would not want your traders to miss out on.

It is a good idea to equip your traders with research from experienced analysts. Offer an edge to your traders with exceptional research by incorporating Acuity’s AnalysisIQ into your trading platform.

Ethereum is Potentially Due for a Rally

ETH was up almost 49% YTD as of July 23, 2024, following the preliminary approval, closing in on the $3,500 mark. The price is expected to break out after the launch of the ETFs and the rally is likely to continue till the target of $5,000 is reached and even continue further.

The impending rally presents colossal opportunities. Informing your traders of the same and providing the necessary tools to help them capture such opportunities can encourage activity on your trading platform and improve revenues for your brokerage.

In fact, the time before the launch is a great opportunity to buy the rumour, which they can sell later as the news of the commencement of trading is digested by the market. Provide your traders with asset-specific news and trading opportunity signals with an exceptional tool to help them make trading decisions confidently. Bring sharper insights directly to their inboxes with Acuity’s AssetIQ.

Top-Notch Technology is All You Need

With exceptional trading technology, Acuity’s Research Terminal is integrated with all its research tools and offers actionable insights. The comprehensive analysis and updates solution allows you to offer a consolidated experiences that allow your traders to focus on their strategies, rather than worrying about seeking the latest insights.

Schedule a demo now to learn how the innovative tool can transform your traders’ experiences and help you expand into newer revenue streams.
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