Europe and Canada Lead the Way in Ethereum ETF Market
While U.S. regulators continue to deliberate on spot Ethereum ETFs, Europe and Canada have already established a strong presence in the market. According to a study by Coingecko, Europe dominates the global Ethereum ETF scene with an 81.4% market share. The region offers 13 ETH-backed ETFs, including both spot products and futures funds, with a total of $4.6 billion in assets under management (AUM).
Canada is also a significant player in the ETH ETF market, holding a 16.6% market share with $949 million in AUM. For many Canadian investors, ETFs have become an entry point into the world of cryptocurrency. Stricter regulations imposed by local regulators have led to the departure of exchanges like Binance and Bitstamp.
As of February 2nd, global ETH ETF AUM reached $5.7 billion across 27 ETFs offering both spot and futures funds. European Ethereum ETFs have been trading since 2017, when Grayscale launched its ETH trust (ETHE). However, Grayscale’s fund was not included in the study due to its closed-ended structure.
Spot Ethereum ETFs in the U.S.
While spot Bitcoin ETFs have been approved in the U.S., SEC chair Gary Gensler has indicated that Ethereum-based products may not receive the same treatment. Gensler believes that most cryptocurrencies qualify as securities and should be registered with the SEC.
However, a recent court ruling against the SEC and the subsequent approval of spot BTC ETFs on January 10th may improve the chances of spot ETH funds receiving regulatory approval. The court found that the SEC’s denial of spot crypto products while allowing futures-based ETFs was “arbitrary and capricious.”
SEC Commissioner Hester Peirce has also stated that Ethereum ETF approvals will follow a different path than Bitcoin, where a court ruling was necessary to prompt the SEC to reconsider its decision.
In the meantime, several spot ETH ETFs, including proposals from Fidelity and Invesco Galaxy, have been delayed until the second quarter of 2024.
Hot Take: The Growing Influence of Europe and Canada in the Ethereum ETF Market
Europe and Canada are emerging as key players in the global Ethereum ETF market. With their substantial market shares and billions of dollars in AUM, these regions are paving the way for mainstream adoption of Ethereum investment products. While U.S. regulators continue to grapple with regulatory decisions, Europe and Canada have taken advantage of the opportunity to attract investors seeking exposure to Ethereum.
As the demand for crypto investment options grows, it is crucial for regulators worldwide to establish clear guidelines and provide a supportive environment for innovation. The success of Ethereum ETFs in Europe and Canada demonstrates the potential economic benefits that can be derived from embracing digital assets. It remains to be seen how the regulatory landscape will evolve in the coming months, but one thing is certain: Europe and Canada are leading the charge in making Ethereum ETFs accessible to investors.
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