Hot New Bitcoin Funds Could Soon Have Rivals

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By Vicky Ge Huang

(The Wall Street Journal) — Wall Street firms launched bitcoin exchange-traded funds just a few weeks ago. Now, they want to offer everyday investors funds holding a smaller and more volatile crypto asset.

At least 10 firms including BlackRock and Fidelity Investments have filed applications to launch what would be the first U.S.-listed ETFs holding ether, the second-largest crypto-currency. As with bitcoin and other ETFs, the firms would earn management fees for any investments people make.

Ether, the in-house token on the Ethereum blockchain, surged above $3,200 Tuesday for the first time since April 2022 in anticipation of the potential approvals. That gave it a market cap of about $390 billion, compared with bitcoin’s more than $1 trillion valuation.

The Securities and Exchange Commission faces a May deadline to approve or reject the first application for a spot ether ETF, and is expected to simultaneously apply the same decision to the other applications. Critics say a greenlight could pave the way for ETFs backed by more speculative crypto assets, which they say would expose investors to more risks than they might realize.