BlackRock's Ethereum Spot ETF Begins Trading Before Market Open Amid Predictions of Subdued Demand

BlackRock's ethereum Spot ETF has started Pre-market trading early Tuesday, following the SEC's approval of multiple ethereum spot ETFs.

This development allows traditional investors to invest directly in ethereum without managing the digital asset themselves, although functionality for staking and other staking-based derivatives has been removed prior to approval.

In a promotional video for its ethereum ETF, BlackRock's US head of thematic and asset ETFs, Jay Jacobs, said:

“While many see bitcoin’s key appeal in its scarcity, many find ethereum’s appeal in its utility (…) one could think of ethereum as a global platform for applications that run without centralized intermediaries.”

<blockquote class="twitter-tweet” data-width=”500″ data-dnt=”true” wp_automatic_readability=”9.228813559322″>

Here's BlackRock's Ether presentation for normies via twitter.com/JayJacobsCFA?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener noreferrer”>@JayJacobsCFA“While many see bitcoin's primary appeal in its scarcity, many find ethereum's appeal in its utility… one could think of ethereum as a global platform for applications that run without decentralized intermediaries.” twitter.com/search?q=%24ETHA&src=ctag&ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener noreferrer”>$ETHA image.twitter.com/ffyglfSTiB

— Eric Balchunas (@EricBalchunas) twitter.com/EricBalchunas/status/1815525501152178615?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener noreferrer”>July 22, 2024

The SEC’s approval for major asset management firms including Fidelity, Grayscale, and Franklin Templeton represents a major milestone for ethereum and the broader cryptocurrency market. Trading for these ETFs is scheduled to begin today at 9:30 a.m. EDT. At the time of writing, the price of ethereum sits at roughly $3,525, up 1% over the past 24 hours, according to data from CoinGecko.

While some analysts predict that these ETFs could see inflows of up to $5.4 billion in the first six months, algorithmic trading firm Wintermute offers a more conservative outlook. The firm forecasts lower-than-anticipated demand, projecting inflows closer to $3.2 to $4 billion. Wintermute expects ethereum ETFs to see between 15% and 20% of the flow seen for bitcoin ETFs, potentially leading to an eth price increase of 18% to 24%.