Ether ETFs set to launch Tuesday, 6 months after Bitcoin funds debut

The U.S. Securities and Exchange Commission appears to have given the green light to exchange-traded funds that hold etherthe world’s second-largest cryptocurrency. Trading is expected to begin as early as Tuesday.

Several fund issuers filed supplemental registration statements Monday afternoon, and exchanges said the funds will begin trading Tuesday, indicating that the SEC has approved the funds.

The regulator did not immediately respond to CNBC’s request for comment Monday. It approved rule changes for exchanges to list Ether funds in May.

Among the companies vying to launch ether funds are big-name asset managers like BlackRock, Fidelity, and VanEck. Crypto-focused firms like Bitwise, 21Shares, and Grayscale — which is effectively converting its multibillion-dollar Ethereum Trust into two ETFs with different fee tiers — are also getting in on the act.

The ether ETFs come about six months after bitcoin ETFs launched, which had some of the most successful debuts in the industry’s history. Together, the funds have attracted more than $16 billion in net inflows, led by the iShares Bitcoin Trust (IBIT), according to FactSet.

Ether funds aren’t expected to be as popular as Bitcoin funds, in part because the total Ether market is about a quarter the size of the major cryptocurrencies.

Still, the funds are expected to be large compared to most ETF launches. Bitwise’s chief investment officer Matt Hougan predicted the funds would attract $15 billion in their first year and a half on the market, with many investors holding both Bitcoin and Ether funds.

“If you think about an investor who doesn’t have a specific viewpoint – who just wants exposure to what blockchains can do – their starting point would be to get exposure to both bitcoin and eth,” Hougan said.

There are already funds on the market that use ether futures contracts, but these new funds will be the first in the United States to buy and hold ether spot.