Will Ethereum bring about the next wave of crypto spot ETFs?

• The final Ethereum ETF approval has signaled rising institutional interest.
• State Street and Galaxy Digital’s collaboration has expanded ETF options beyond Bitcoin, boosting crypto adoption. 

As we approach the much-anticipated approval of spot Ethereum [ETH] Exchange Traded Funds [ETFs], projected for a launch on the 4th of July according to a Reuters report, the market is not responding favorably.

According to CoinMarketCap data, Bitcoin [BTC], along with all major cryptocurrencies, were displaying red candlesticks on their daily charts at the time of writing.

However, price action is not the only metric that reflects investor interest.

Surge in institutional interest for Ethereum

In fact, despite the recent price decline, ETH CME (Chicago Mercantile Exchange) futures Open Interest (OI) is rising, mirroring the trend observed in BTC before the start of ETF trading.  

Remarking on the same, a known blockchain influencer, Oliver Isaacs took to X (formerly Twitter) and noted, 

“Don’t be blinded by slow bleeding market conditions, one impulsive candle will erase long periods of poor PA.” 

Source: Oliver Issacs/X

This increase in Ethereum CME Futures OI indicated growing institutional interest, heightened market activity, and a bullish sentiment toward ETH. 

State Street and Galaxy Digital’s partnership

However, this isn’t the only positive news that has captured investors’ attention.

Recently State Street Global Advisors (State Street) and Galaxy Digital announced their collaboration to introduce new ETFs that provide exposure to digital assets.

Both companies have indicated in separate announcements that these ETFs will go “beyond” just spot Bitcoin ETFs, suggesting a broader range of digital asset investments. 

According to a press release report released on the 26th of June, 

“This collaboration of market-leading, global asset managers is designed to bring investors the newest innovation in digital asset investing.” 

This collaboration highlights the synergy between two leading firms which will provide investors access to the “$2.4 trillion digital asset ecosystem through manager-directed strategies.”, as per the report. 

Community reaction

Expanding on the same, Mike Novogratz, Founder and CEO of Galaxy Digital, said, 

“Expanding investment options beyond pure spot Bitcoin is where we see the next level of growth for the ecosystem.”

This highlights how crypto is becoming a mainstream asset class with every passing day. 

The reason the crypto community is excited about this partnership is that State Street has been focusing on digital assets for more than 30 years.

It has also been one of the largest global ETF providers, launched the first U.S.-listed ETF in 1993, and now manages over $4.3 trillion in assets. Hence, the optimism is justified! 

Not the first time

Interestingly, this isn’t the first time ETF news has spread like wildfire. Recently, Ripple CEO Brad Garlinghouse, speaking at Consensus 2024, highlighted the potential for additional ETFs in the pipeline.

He said, 

“I think it’s just a matter of time, and it’s inevitable there’s gonna be an XRP ETF, there’s gonna be a Solana ETF, there’s gonna be a Cardano ETF, and that’s great.” 

Therefore, even though it took decades for Bitcoin ETFs to gain approval, it has opened the gates for broader cryptocurrency adoption and the potential approval of other ETFs at a larger scale.