- Europe and Canada account for nearly 98% of the $5.7 billion Ethereum ETF market.
- The introduction of spot ETFs in the US could significantly alter the landscape.
Amidst expectations for the approval of spot Ethereum ETFs in the US, CoinGecko experts have examined the global market for such products, revealing the dominance of Europe and Canada.
Which countries have Ethereum ETFs?
Our study shows that #Ethereum ETFs are incorporated in 13 countries worldwide and traded in 7 geographical markets.
Read the full study: https://t.co/efFNKgQAWP pic.twitter.com/idOhkmCi2j
— CoinGecko (@coingecko) February 6, 2024
The largest exchange-traded funds based on the second-largest cryptocurrency by market capitalization are XBT Ethereum Tracker One and XBT Ethereum Tracker Euro, with assets of $3.34 billion and $511 million, respectively.
CoinShares’ subsidiary launched futures-based products in 2017. Both ETP from XBT Provider are traded on the Swedish Nasdaq Stockholm exchange.
In third place is the Canadian spot fund CI Galaxy Ethereum ETF, with assets of $478 million.
The European product 21Shares Ethereum Staking ETP has $329 million in assets. Launched in 2019, it was the first exchange-traded fund based on the spot price of ether.
All 10 of the largest Ethereum ETFs are traded either in Europe or Canada. In contrast, US futures-based funds, which launched without much fanfare in October 2023, rank 14th and below.
Market Geography
Globally, there are 27 active ETH ETFs with a combined capital of $5.7 billion. This figure is less than the Grayscale Ethereum Trust’s assets of $6.76 billion.
The top ten exchange-traded funds in the segment account for a disproportionately large market share of 96.4%, experts noted. Despite the increase in providers, a modest group of players dominates, they added. Three products from the top ten are managed by CoinShares group companies.
The year 2021 was particularly “fruitful” for the emergence of Ethereum ETFs. Amidst a bullish cryptocurrency market, 12 such products were launched in Europe, Canada, and Brazil.
In 2022, the offering expanded by six more products, with the geography extending to Australia and Hong Kong.
Ethereum ETFs are registered in 13 countries but are traded only in seven geographical markets, which in 2023 and 2024 included the US and Malaysia, respectively.
Europe leads the segment with 13 exchange-traded funds, holding assets of $4.65 billion or 81.45% of the total. Canada operates six funds with a capital of $949.25 million (16.64%).
Next is Brazil: two Ethereum ETFs hold $47.3 million (0.83%).
Notably, the US and Hong Kong only have futures funds, while Canada, Brazil, Australia, and Malaysia have exclusively spot funds. Europe is the only market offering both types of products.
Outlook
The segment’s situation could change dramatically if the US Securities and Exchange Commission (SEC) approves spot Ethereum ETFs. Grayscale plans to convert its $6.76 billion trust into such an exchange-traded product.
Some experts believe the lackluster interest of American investors in futures-based Ethereum funds is due to the anticipation of spot ETFs.
On January 10, the SEC registered 11 such bitcoin-based products. By the end of January, instruments from BlackRock and Fidelity entered the top ten US funds by inflow, totaling $4.8 billion.
The first futures-based ETF on the leading cryptocurrency was approved by the SEC in October 2021. At the time of writing, the asset value of the Bitcoin Strategy ETF from ProShares stands at $587 million.
Before the emergence of spot funds, the combined AUM of exchange-traded bitcoin products did not exceed $6.2 billion.
In recent months, the SEC has postponed decisions on applications to launch spot Ethereum ETFs from several companies, including Grayscale and BlackRock.
Some experts believe the regulator will register the products in May. Grayscale suggested the agency might make a positive decision in the summer.
In December, SEC Chairman Gary Gensler, commenting on the agency’s change of stance regarding spot bitcoin funds, cited “court decisions” as one of the reasons. SEC Commissioner Hester Peirce expressed confidence that such processes would not be necessary for Ethereum.
However, some analysts doubt the swift registration of spot ETH funds for various reasons.
BlackRock CEO Larry Fink stated that he “sees value” in such Ethereum products, calling them a step towards tokenization.