Fidelity’s Spot Ethereum ETF Listed by DTCC

The Depository Trust & Clearing Corporation (DTCC) has listed a spot price-based Ethereum exchange-traded fund by Fidelity Investments.

The product, named Fidelity Ethereum FD Beneficial INT, carries the ticker FETH and is marked as currently unavailable for creation/redemption.

“This file includes both active ETFs that can be processed in DTCC and inactive ones that cannot be processed until such securities receive all necessary regulatory and other approvals,” the document states.

At present, the corporation has included similar products from VanEck, Franklin Templeton, and BlackRock in its list.

On May 23, the U.S. Securities and Exchange Commission (SEC) approved 19b-4 applications from issuers of spot exchange-traded funds based on Ethereum. Among the approved companies are Grayscale, ARK Invest/21Shares, Invesco/Galaxy, and Bitwise.

Now, issuers of Ethereum ETFs need SEC approval of S-1 documents to commence trading.

BlackRock has already submitted an amended form to the regulator, revealing information about the initial investor. On May 21, an “affiliate” acquired 400,000 shares at $25 each to create the initial offering.

Bloomberg analyst Eric Balchunas called BlackRock’s application a “good sign.”

Good sign. Prob see rest roll in soon. Then prob one more round of fine-tune comments from Staff. End of June launch a legit possibility altho keeping my o/u date as July 4th https://t.co/WymshkTvat

— Eric Balchunas (@EricBalchunas) May 29, 2024

“Probably soon the rest will follow. Then there will be another round of comments from the staff. By the end of June, there is a real possibility to keep my predicted date [of approval] as July 4th,” he added.

According to him, the asset manager’s S-1 is evidently not the final version, as it lacks several necessary details. But it is “close to the final version,” the expert concluded.

A Political Decision After All?

ARK Invest CEO Cathie Wood, during the Consensus 2024 conference, confirmed JPMorgan analysts’ view that the approval of spot Ethereum ETFs was a political decision, according to CoinDesk. She stated that cryptocurrency has become a U.S. presidential election issue, prompting the SEC to change its stance suddenly and unexpectedly.

“It was believed that this would not be approved. Absolutely not,” she said.

The head of ARK Invest noted that the Commission did not even ask applicants questions, which is usual practice when reviewing proposals. Wood believes that the change in the administration’s mood was influenced by the House of Representatives’ adoption of the FIT21 bill. Bipartisan support for the document demonstrated that attitudes toward cryptocurrency could become an election-year issue.

Another important factor, according to Wood, was statements by Donald Trump, the leading Republican candidate, about supporting the industry if elected. Additionally, he began accepting donations in digital assets, which drew attention to his stance.

Amid the regulator’s policy shift regarding spot Ethereum ETFs, Standard Chartered’s head of research, Geoffrey Kendrick, suggested a new phase for crypto funds in 2025. In his view, SOL and XRP are next in line.

Matrixport co-founder Daniel Yan also named Solana as a new contender for launching exchange-traded funds.

Wood also believes that an ETF based on this cryptocurrency could be approved, but products based on meme coins are unlikely.

Back in JPMorgan, doubts were expressed about the SEC approving exchange-traded funds based on Solana or other cryptocurrencies. Analyst Nikolaos Panigirtzoglou noted that the regulator still considers most digital assets as securities.