Grayscale’s Ethereum Mini ETF Gets SEC Green Light: A Game Changer for Crypto Funds

• The SEC has approved Grayscale’s small Ethereum ETF and ProShares’ Ethereum ETF, with trading to begin next week.
• Grayscale’s small ETF will use assets from its larger fund, offering lower fees and more flexible options.
• Experts believe these new small ETFs will stabilize the market and boost competition among Ethereum investment products.

The U.S. Securities and Exchange Commission (SEC) has approved Grayscale’s mini Ethereum exchange-traded fund (ETF), which will be seeded with assets currently backing the larger ETF.

Alongside this approval, the SEC has also given the green light to ProShares’ Ethereum ETF. These funds are likely to start trading next week, coinciding with the launch of other spot Ethereum ETF products. Additionally, Grayscale has introduced a mini Bitcoin ETF, offering lower fees compared to its flagship Bitcoin product.

The SEC’s decision came as a surprise to many, given the regulatory body’s previously cautious stance towards cryptocurrency ETFs. In May, the SEC unexpectedly approved proposals from Grayscale and several other asset managers to launch spot Ethereum ETFs. 

Grayscale initially proposed converting its longstanding Grayscale Ethereum Trust into a spot Ethereum ETF. The trust, which operates like a closed-end fund, presents challenges in redeeming shares. To address this, Grayscale filed for a mini trust, which would be seeded with assets currently backing the larger ETF. This strategic move aims to provide more flexible investment options for shareholders.

Bloomberg Intelligence ETF analyst James Seyffart commented on the development, noting that the mini fund could help alleviate some of the anticipated outflows from Grayscale’s larger fund conversion. “The mini fund should help alleviate some of the likely Grayscale outflows,” Seyffart said on X (formerly Twitter). His insights suggest that the mini ETF could stabilize the market by offering an alternative investment vehicle with potentially lower fees.

On Monday, sources confirmed to Crypto Front News that the newly approved Ethereum ETFs are likely to start trading on July 23. This launch date sets the stage for a series of spot ETH ETF products to enter the market simultaneously. Investors and market analysts will be closely watching the performance of these funds, as their success could pave the way for more cryptocurrency ETFs in the future.

Another well-known asset management, ProShares, recently got SEC approval for its Ethereum exchange-traded fund. The simultaneous approval of Ethereum-based investment products by ProShares and Grayscale highlights the SEC’s wider embrace of these products. With additional alternatives for investors to diversify their portfolios with bitcoin assets, this move is anticipated to increase competition in the ETF industry.