Ethereum News
SEC approval of Ethereum ETFs and divergence in market flows
The SEC Rule Change and the S-1 Registration Hurdle
The SEC approved 19b-4 forms for eight ether ETF applications, including BlackRock, Fidelity, Grayscale, ARK Invest, VanEck, Invesco Galaxy, and Franklin Templeton. These approvals allow for the listing and trading of spot ether funds on regulated exchanges. I see that the S-1 registration statements still require approval before the funds can officially debut. The SEC order did not provide a timetable for S-1 approvals or a date for the start of trading. This decision follows the SEC approval of spot bitcoin ETFs in January. The commission approved the ether applications under rules for commodity-based trust shares. No sponsors filed under the Investment Company Act of 1940, which applies to ETFs that trade securities. The SEC cited the high correlation between spot ETH prices and the Chicago Mercantile Exchange ETH futures market to support the order. This approval came without the litigation that followed the Bitcoin ETF process, where three federal judges ordered the SEC to grant approval after Grayscale Investments won in court. The commission’s decision shows a departure from the regulation by enforcement stance that characterized previous crypto interactions. VanEck expects its spot ethereum ETF to trade on the CBOE exchange after final approvals.
Recent Outflows and the Rotation Toward Bitcoin
The Ethereum ETF market saw $160.9 million in outflows on October 7, 2026. BlackRock’s iShares Ethereum Trust (ETHA) accounted for over two-thirds of this amount, with $116.05 million in redemptions on that day. On October 6, 2026, total outflows across US spot Ethereum ETFs hit $201.9 million. This follows a period on September 16, 2026, when ETHA lost $110 million during a total sector outflow of $224 million. You already know the mechanics of asset rotation, so I will focus on the divergence between these flows and bitcoin. US spot bitcoin ETFs recorded net inflows of $119 million on October 6, 2026, while ethereum products saw their $201.9 million exit. I see this as a strategic reallocation of capital between assets. The total assets across the Ethereum ETF sector stood at approximately $17.36 billion as of early October 2026. For comparison, during its first day in the market, the ethereum ETF sector recorded $1.08 billion in volume, which was only a quarter of the $4.66 billion in trade volume seen by its bitcoin counterpart. ETHA has accumulated over $13 billion in net inflows since its July 2024 launch. In contrast, the bitcoin ETF market saw inflows of $13.44 billion through May 23. The divergence between the $119 million bitcoin inflow and the $201.9 million ethereum outflow on October 6 highlights the shifting sentiment.
Staking Prohibitions and Options Trading Delays
The SEC currently prohibits sponsors from staking ETH via the approved ETFs. This restriction prevents investors from receiving the network’s native staking yield. The SEC argued in lawsuits against Coinbase and Kraken that staking-as-a-service constitutes an unregistered security. This lack of staking could lead to lower demand for ethereum ETFs compared to bitcoin products.
| Fund Name | Management Fee | Assets Under Management |
|---|---|---|
| iShares Ethereum Trust (ETHA) | 25 bps | $6.22 billion |
| Fidelity Ethereum Fund (FETH) | 25 bps | $1.29 billion |
| Grayscale Ethereum Staking ETF (ETHE) | 250 bps | $1.78 billion |
| Bitwise Ethereum ETF (ETHW) | 20 bps | $219.7 million |
| BlackRock ETHB | 0.25% | $100 million initial AUM |
The SEC also delayed decisions regarding options for these funds. The commission moved the deadline for Cboe’s request to list options on nine ETFs to December 3. A separate request from Nasdaq regarding options for the iShares Ethereum Trust faces a deadline of November 11. These delays follow the September 20 approval of options tied to BlackRock’s Bitcoin ETF. BlackRock’s ETHB fund uses specialized validators such as Figment, Galaxy Blockchain Infrastructure, and Attestant. The ETHB fund operates with a monthly dividend structure that attracts investors focused on cash flow. The ETHB fund also has a management fee of 0.25%, which reduces to 0.12% during the first year or until the fund reaches $2.5 billion in assets.
Price Action and Long-Term Forecasts
Ethereum price reached $3,750 on Friday afternoon, which is below the $3,894 peak from Thursday. The price remains below the March 12 52-week high of $4,092 and the November 2021 peak of $4,800. Throughout 2024, ethereum price spiked nearly 64%. Analysts predict different price targets for the coming months. Standard Chartered projects a price of $15,000 by 2027. Arthur Hayes targets a range between $10,000 and $20,000 by the next US election cycle. Tom Lee from Fundstrat predicts $7,000 to $9,000 by early 2026. Ethereum’s utility as a platform for smart contracts and decentralized applications drives interest. During the 12 months of 2024, monthly ethereum gas fees ranged from $1.22 million to $38 million. The network hosts over 4,000 decentralized applications. I notice the ETH/BTC pair trades near multi-year lows. The market experienced a "sell the news" event when the price of ether dropped 3.4% just before the SEC announcement, though it later rebounded by 5%. This volatility mirrors the bitcoin market, where the price dropped 17% initially following ETF launches before spiking 90% higher three months later. The Relative Strength Index (RSI) briefly surpassed 90, and the 30-day moving average remains above the 200-day average. Will the SEC ever allow for the inclusion of staking rewards in these ETF products?
