SEC Approves Grayscale Ethereum Mini Trust

The SEC has approved two Ethereum (ETH) exchange-traded funds (ETFs) – Grayscale Ethereum Mini Trust and ProShares Ethereum ETF. These ETFs will be listed on the New York Stock Exchange’s Arca platform following the SEC’s approval via a Form 19b-4 filing, allowing NYSE Arca to begin trading these funds.

However, trading cannot start immediately. Final steps include waiting for comments on the ETFs’ S-1 filings. “After careful review, the Commission finds that the Proposals are consistent with the Exchange Act and related regulations,” the SEC stated.

Grayscale Ethereum Mini Trust is a notable player. This new ETF is an evolution from the Grayscale Ethereum Trust (ETHE), a closed-end fund recently converted into an ETF. This change shows Grayscale’s strategy to meet investor needs and regulatory standards by offering more accessible investment products.

James Seyffart, an ETF analyst at Bloomberg, commented on the asset allocation for the Grayscale Ethereum Mini Trust. This strategy aims to provide stability at launch, mitigating potential outflows. “The mini Ethereum ETF will launch with others, seeded with 10% of ETHE’s assets. This should help manage possible Grayscale outflows,” Seyffart said.

ProShares Ethereum ETF has joined the market slightly later. These ETFs are part of a broader wave of similar products soon hitting the market. A total of eight spot Ethereum ETFs are awaiting final SEC approval. These developments follow extensive deliberations between issuers and the SEC, highlighting the rigorous scrutiny involved in introducing crypto-based products into regulated financial exchanges.

Such scrutiny ensures investor protection while accommodating the growing interest in digital assets. The financial structure of these ETFs is also designed to attract investors. Most upcoming Ethereum ETFs, including those from Franklin Templeton, VanEck, and Fidelity, will initially offer a 0% fee period.