Ethereum Spot ETF Officially Approved for Trading

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On July 23, the U.S. Securities and Exchange Commission (SEC) officially approved the S-1 filings from multiple ETF issuers, marking the formal launch of spot Ethereum exchange-traded funds (ETFs). Initial trading is expected to begin the following day—Tuesday in U.S. time, which corresponds to the evening of Wednesday in Beijing time.

The SEC has notified at least two of the eight companies applying to launch the first U.S. spot Ethereum ETFs that their products are cleared for trading starting Tuesday. ETFs from BlackRock, VanEck, and six other firms will debut simultaneously across three major exchanges: the Chicago Board Options Exchange (CBOE), Nasdaq, and the New York Stock Exchange. All three exchanges have confirmed they are fully prepared for the new listings.

This approval represents a landmark moment for the crypto industry, reinforcing institutional confidence and signaling a maturing regulatory environment.

👉 Discover how Ethereum’s latest milestone could reshape digital asset investing.

A Decade in the Making: From ICO to Institutional Acceptance

Exactly ten years prior—on July 22, 2014—Ethereum launched its initial coin offering (ICO), raising 31,529 BTC through a token presale at a rate of 1 BTC for 2,000 ETH. At the time, this amounted to over $18 million in funding, laying the foundation for what would become the most widely used smart contract platform in blockchain history.

Fast forward to 2025, and Ethereum has transitioned from a nascent blockchain project into a mainstream financial asset backed by Wall Street giants. The journey wasn’t smooth—approval odds for a spot Ethereum ETF were estimated at just 7% as recently as two months ago. But sentiment shifted dramatically, with approval probability surging to 75% after key regulatory filings were accepted.

On May 24, the SEC approved 19b-4 filings for several spot Ethereum ETFs, including those from BlackRock, Fidelity, and Grayscale. Today’s S-1 greenlight finalizes the process, enabling public trading.

Overcoming Regulatory Hurdles

Security Classification and Proof-of-Stake Concerns

Unlike Bitcoin, Ethereum faced unique regulatory challenges due to its fundraising history and shift to proof-of-stake (PoS).

Because Ethereum conducted an ICO in 2014—a form of crowdfunding—regulators questioned whether ETH should be classified as a security rather than a commodity. Compounding this concern was Ethereum’s lack of a hard supply cap and its transition to PoS in September 2022, which led the SEC to investigate the Ethereum Foundation over potential securities law violations.

Under PoS, large ETH holders can influence network validation and earn staking rewards—raising concerns about centralization and market manipulation. Data from Glassnode shows that around 55% of ETH supply is held by just 1,006 addresses, reinforcing these concerns.

To address them, ETF applicants—including Ark Invest, 21Shares, and BlackRock—agreed not to stake any ETH held in their trusts. By removing staking functionality, these ETFs avoid creating expectations of profit derived from others’ efforts—a key criterion under the Howey Test for securities classification.

👉 See how leading asset managers are navigating crypto regulations.

The Hong Kong Precedent

While the U.S. approval grabs headlines, Hong Kong beat America to market. On April 15, 2025, the Securities and Futures Commission (SFC) of Hong Kong approved the first wave of spot crypto ETFs, including both Bitcoin and Ethereum products from CSOP Asset Management (Hong Kong), Harvest Fund International, and Bosera International.

These six ETFs began trading on April 30 at the Hong Kong Stock Exchange—the first time spot Ethereum ETFs became publicly available globally.

Key funds include:

Hong Kong’s early adoption reflects its progressive stance on digital assets, driven by strategic positioning as a global financial hub and a desire to capture pricing authority in Asian crypto markets.

Some analysts initially dismissed Hong Kong’s move as symbolic. However, it may have set a crucial precedent, demonstrating that spot Ethereum ETFs can operate under strict but supportive oversight—potentially influencing the SEC’s decision.

Market Impact and Future Outlook

Price Implications and Institutional Demand

At the time of writing, Ethereum traded at $3,445—a 2.5% drop over 24 hours—suggesting that much of the ETF approval news had already been priced in.

Nonetheless, long-term projections remain bullish. Wintermute, a leading crypto market maker, forecasts up to $4 billion in investor inflows into Ethereum ETFs within the first year. This could drive ETH’s price up by as much as 24% over the next 12 months.

Geoff Kendrick, Head of FX and Digital Asset Research at Standard Chartered, estimates that spot Ethereum ETFs could attract between 2.39 million and 9.15 million ETH in their first year—equivalent to $15–45 billion in assets under management.

“If Bitcoin reaches $150,000 by end-2025,” Kendrick added, “we expect Ethereum to hit $8,000.”

Boost for Altcoins and DeFi Ecosystems

Ethereum’s role as the backbone of decentralized finance (DeFi) means its price movements directly impact thousands of altcoins. Most decentralized exchanges (DEXs) use ETH as the primary trading pair; thus, rising ETH prices often lead to broad-based gains across altcoin markets.

While initial reaction in altcoin markets was muted—even slightly negative—the long-term effect is likely positive. Approval of a spot Ethereum ETF legitimizes not just ETH but the broader ecosystem of dApps, NFTs, and Layer-2 solutions built on Ethereum.

Moreover, this milestone may pave the way for future ETF applications involving other major cryptocurrencies like Solana or Cardano—provided they can navigate similar regulatory hurdles.

Shifting Regulatory Landscape

The approval signals a potential pivot in U.S. crypto policy. With elections underway, both Democratic and Republican lawmakers are increasingly vocal about supporting pro-innovation frameworks.

Notably, former House Speaker Nancy Pelosi is considering backing the FIT21 bill—a bipartisan effort aimed at clarifying regulatory jurisdiction between the CFTC and SEC. Another critical proposal, SAB121, which impacts crypto custody rules, is also nearing resolution.

Alex Thorn of Galaxy Digital previously argued that while ETH itself may not be a security, staked ETH could qualify under current definitions. The compromise reached—non-staking ETFs—aligns closely with FIT21’s goal: to clearly define which digital assets are commodities versus securities.

This distinction is vital: commodities fall under CFTC oversight with lighter regulation, while securities face stricter SEC scrutiny.

Frequently Asked Questions

Q: What is a spot Ethereum ETF?
A: A spot Ethereum ETF directly holds actual ETH tokens and tracks their market price in real time, unlike futures-based ETFs that rely on derivatives contracts.

Q: Why did it take longer for Ethereum than Bitcoin to get ETF approval?
A: Due to Ethereum’s ICO history and transition to proof-of-stake, regulators were concerned about centralization and potential securities classification—issues less prominent with Bitcoin.

Q: Can I stake my ETH through these ETFs?
A: No. To reduce regulatory risk, all approved U.S. spot Ethereum ETFs have agreed not to engage in staking activities.

Q: How might this affect altcoin prices?
A: As ETH strengthens and institutional capital flows into the ecosystem, altcoins tied to DeFi protocols and dApps on Ethereum often experience secondary price rallies.

Q: Are these ETFs available outside the U.S.?
A: Yes. Hong Kong launched spot Ethereum ETFs in April 2025. Other jurisdictions may follow as global regulators observe market stability.

Q: Will more crypto ETFs be approved now?
A: Likely. The success of Bitcoin and now Ethereum ETFs creates momentum for future applications—especially for large-cap assets with transparent issuance models.

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