The cryptocurrency market reached a significant milestone this week with the introduction of spot ether ETFs.
Franklin Templeton is one of nine firms whose spot ether ETF recently received approval from the Securities and Exchange Commission (SEC). The Franklin Ethereum ETF (EZET) has fallen about 10% since its launch, attributed to a broader sell-off in the cryptocurrency market.
David Mann, head of ETF products and capital markets at Franklin Templeton, expressed optimism about the future of these ETFs despite the initial setbacks. Speaking on CNBC’s “ETF Edge” on Tuesday, Mann said, “We believe they will succeed. They are unlikely to attract the same level of assets as spot bitcoin ETFs, but it is still an exciting development.”
Similarly, global investment manager VanEck launched the VanEck Ethereum ETF (ETHV), which also received SEC approval. VanEck CEO Jan Van Eck expects spot ether ETFs to offer investors a way to diversify their portfolios. However, he tempered expectations, noting, “I don’t think they’ll be as successful as spot bitcoin ETFs.”
VanEck’s new fund has also seen significant declines since its debut.
Morningstar’s Ben Johnson offered a longer-term perspective, suggesting that trading volumes for spot ether ETFs are in line with ether’s market cap relative to Bitcoin. “There’s a healthy appetite and demand,” said Johnson, Morningstar’s head of client solutions. “ETFs are opening up new markets and packaging opportunities in a convenient way for investors.”
Ether took a significant hit on Thursday, ending the week down about 11%. Despite this, Ether has seen a 38% increase year-to-date.