As the United States continues to ponder the approval of spot Ethereum ETFs, Europe and Canada have surged ahead, establishing a strong presence in the Ethereum ETF market. With a significant market share and billions in assets, they lead the way in this sector.

Europe: The Leader in Ethereum ETF Market

According to a recent Coingecko study, Europe holds a commanding 81.4% market share in the global Ethereum ETF landscape. With 13 Ethereum-backed ETFs, which include both spot products and futures funds, Europe boasts an impressive $4.6 billion in assets under management (AUM). These ETFs have been trading since 2017, starting with Grayscale’s ETH trust. However, it’s important to note that Grayscale’s fund, due to its close-ended structure, was not included in this study.

Canada’s Position in the Market

Not far behind, Canada has carved out a significant portion of the market for itself, holding a 16.6% market share. This translates to $949 million in AUM. The introduction of stricter regulations for crypto companies in Canada has led to an exodus of exchanges, but it has also paved the way for ETFs to become a popular investment vehicle among Canadian investors.

Global Ethereum ETF Overview

Globally, Ethereum ETFs account for $5.7 billion in AUM as of February 2nd, spread across 27 funds that feature a mix of spot and futures products. This broad distribution demonstrates the growing interest and diversification of investment strategies within the crypto ETF sector.

U.S. Regulatory Hurdles and Developments

While Europe and Canada progress, the U.S. is engaged in a regulatory tango with crypto companies. The U.S. Securities and Exchange Commission (SEC) has not yet given the nod to spot Ethereum ETFs. The SEC chair, Gary Gensler, has indicated that Ethereum-based products might not be treated the same as Bitcoin ETFs, considering most cryptocurrencies as securities that need to register with the SEC.

Despite these challenges, the SEC’s recent loss to Grayscale in court over the denial of spot crypto products and the approval of spot Bitcoin ETFs signal a potential shift in the regulatory landscape. This could improve the prospects for Ethereum ETFs in the U.S., with several applications postponed until the second quarter of 2024.

Looking Ahead

As the U.S. SEC deliberates on its approach to Ethereum ETFs, the global market watches and waits. The outcome of these decisions will undoubtedly have far-reaching implications for the future of cryptocurrency investments and the broader financial markets.