Ethereum Spot ETF Officially Launched: Limited Short-Term Impact, Profound Long-Term Significance

On July 23, 2024, the US Ethereum Spot ETF officially began trading, coinciding with the 10th anniversary of Ethereum's first public fundraising. This milestone event holds significant importance for the sustainable development of the crypto industry, marking the official entry of POS public chains into the mainstream financial sector. It will attract more talent to join the Ethereum ecosystem's construction and pave the way for other public chains like Solana to enter the mainstream market, which is of great significance for the popularization process of the blockchain ecosystem.

However, due to regulatory reasons, Ethereum ETFs are currently not allowed to stake, and investors holding the ETF will receive 3%-5% less staking yield compared to directly holding Ethereum. Additionally, the understanding threshold for ordinary investors regarding Ethereum is relatively high, so the short-term impact of this ETF listing on the price of Ethereum may not be as significant as the impact of the Bitcoin ETF on BTC prices; rather, it has more so enhanced the stability of Ethereum's price and reduced volatility.

In the short term, the power of both buyers and sellers is not as strong as that of Bitcoin ETF, and the impact of Ethereum ETF is expected to be less than that of Bitcoin.

1. On the selling side: Grayscale's Ethereum Trust ( ETHE ) has a significant difference in management fees compared to competitors, which may still lead to early capital outflows, but the scale may be smaller than GBTC. Grayscale has split 10% of its assets to establish a low-fee mini trust, which has alleviated outflow pressure to some extent.

2. On the buying side: Due to the prohibition of staking, holding an ETF will result in a loss of 3%-5% staking yield. At the same time, ordinary investors have a lower awareness of Ethereum compared to Bitcoin, and those optimistic about cryptocurrency investments may be more inclined to choose the clearly supplied Bitcoin ETF.

3. There is basically no buying demand in the crypto circle, as the ETF cannot obtain on-chain staking yields of 3%-5%.

In the long run, the Ethereum ETF has paved the way for other crypto assets to integrate into the mainstream world:

1. Ethereum, as the largest public chain, having its ETF approved is an important step for public chains to integrate into the mainstream financial world.

2. Ethereum meets SEC requirements in terms of anti-manipulation, liquidity, and pricing transparency. In the future, more eligible crypto assets may enter the ordinary investor's view through ETFs.

3. Other public chains like Solana that have a large number of users and ecosystems are also expected to gradually integrate into the mainstream market.

In summary, the listing of the Ethereum ETF has limited impact on prices in the short term, but significant long-term implications. It marks the convergence of the crypto ecosystem and traditional finance, where the cognitive differences between new and old participants may become key factors influencing the price volatility of cryptocurrencies and creating investment opportunities. Historically, the process of emerging assets integrating into mainstream markets is often accompanied by divergences and fluctuations, which also brings investment opportunities that are worth looking forward to.