As the progress of the Ethereum spot ETF has attracted market attention, the prolonged delay in the resolution of ETH has raised concerns among some investors about whether the ETH spot ETF application will be approved. Next, I will provide a detailed introduction to the relevant knowledge of the ETH spot ETF.

The Bitcoin spot ETF was approved in January 2024 and subsequently listed on the US stock exchange, which has excited the entire cryptocurrency industry. As the second-largest cryptocurrency in the market, the progress of the Ethereum spot ETF has also attracted market attention. The prolonged delay in the resolution of ETH has raised concerns among some investors about whether the ETH spot ETF application will be approved. According to current data analysis, the ETH spot ETF application will be approved, and it was officially approved on July 22, 2024. Next, I will provide a detailed introduction to the relevant knowledge of the ETH spot ETF.

Will the ETH spot ETF application be approved?

Will the ETH spot ETF application be approved? The US Securities and Exchange Commission (SEC) officially approved the listing applications for Ethereum spot ETFs from eight companies on July 23, 2024, including BlackRock's iShares, Grayscale, Franklin Templeton, VanEck, Bitwise, 21Shares, Fidelity, and Invesco.

The application process for the ETH spot ETF has been relatively tortuous. Initially, the SEC estimated the chance of approval for the Ethereum spot ETF at only 7%, but as multiple issuers removed staking provisions and modified application documents multiple times, the approval chance gradually rose to 75%. Ultimately, the SEC officially approved these applications on July 23, 2024, marking the formal entry of the Ethereum spot ETF into the US mainstream financial market.

The approval of the ETH spot ETF has had a significant impact on the market, with a trading volume of $1.07 billion on its first day. Although this is lower than the $4.6 billion trading volume on the first day of the Bitcoin spot ETF, it still shows a positive market response. Market analysts expect that the launch of the ETH spot ETF will further promote the legalization and stability of the cryptocurrency market and may trigger a new round of bull market growth.

What is the ETH spot ETF?

The ETH spot ETF is an exchange-traded fund that operates similarly to traditional stock trading. Investors can buy and sell ETF shares directly through a stock exchange without directly holding or managing Ethereum tokens. This type of ETF typically tracks ETH price movements by holding Ethereum futures contracts, allowing investors to indirectly invest in the Ethereum market.

The ETH spot ETF actually holds ETH. When you invest in an Ethereum spot ETF, the fund purchases and holds ETH on your behalf. The value of ETF shares directly reflects the current market price of Ether. In contrast, an Ethereum futures ETF does not hold actual ETH.

On the contrary, the fund invests in futures contracts based on the price of ETH. These are agreements to buy or sell Ether at a set price on a future date. In other words, the Ethereum futures ETF tracks the price of ETH by speculating on its future price rather than holding the cryptocurrency itself.

Through ETFs, investors do not need to directly buy and manage cryptocurrencies, simplifying the investment process. ETFs can be traded all day on stock exchanges, providing higher liquidity. ETFs are subject to regulatory scrutiny, reducing fraud risk and increasing investment security. Like all cryptocurrencies, the price of Ethereum can be highly volatile, which may pose investment risks. The management fees and transaction fees of ETFs may be higher than directly holding Ethereum tokens.

How can Ethereum transaction fees be reduced?

Ethereum transaction fees are too high. Investors can reduce costs by choosing appropriate miner fees, using smaller transaction volumes, choosing off-peak times, using Layer 2 scaling solutions, utilizing tools, batch transfers, and looking for token airdrops. The following is a detailed introduction:

1. Choose an appropriate miner fee: Miner fees are paid to miners to ensure transactions are packaged and recorded on the Ethereum blockchain. Generally, the higher the miner fee, the higher the chance of the transaction being prioritized. If you are not in a hurry to complete the transaction, you can choose a lower miner fee.

2. Use smaller transaction amounts: The transaction volume refers to the amount of Ether involved in the transaction. Smaller transaction volumes usually mean lower fees. If you only need to send a small amount of Ether or tokens, you can keep the transaction volume within a smaller range to reduce fee expenditures.

3. Choose off-peak times: Ethereum network transaction fees typically rise due to network congestion. Choosing to transact during off-peak times can help you avoid high fees. You can choose to transact during times when the Ethereum network is more stable.

4. Use Layer 2 scaling solutions: Ethereum is developing Layer 2 scaling solutions, such as Rollups and Sidechains, to improve the network's scalability and reduce transaction costs and time. By processing transactions on Layer 2 networks, you can save on fees from the Ethereum main network.

5. Use tools: Some tools and websites provide real-time gas price information, allowing users to choose optimal settings for transactions. This helps you complete transactions at lower costs at the right time.

6. Batch transfers: If you need to transfer small amounts of Ethereum multiple times, you can consider combining multiple transfers into one transaction, which can significantly reduce fees.

7. Look for token airdrops: Some token projects distribute tokens to Ethereum holders through airdrops. Participating in token airdrops can allow you to receive tokens without paying additional fees. You can follow the announcements and social media channels of token airdrops for relevant information.

How is Ethereum transaction fee calculated?

The cost of transactions on the Ethereum network has two aspects: first is the base fee, which will be burned. Second is the priority fee or tip, which is paid to network validators. Both types of fees are influenced by market forces, meaning that when the network is congested, fees will rise. The total cost of a transaction also depends on its complexity.

The complexity of transactions is measured by computational effort and expressed in 'gas' units. For example, sending ETH from one wallet to another can consume up to 21,000 gas units. One gas unit equals 0.000000001 ETH (this unit of ETH measurement is also known as qiga-wei or gwei).

Total fee calculation for Ethereum transaction fee = Gas units * (Base fee + Tip)

For example, if Alice sends 1 ETH to Bob, assuming the base fee is 100 gwei and Alice includes a tip of 10 gwei. Using the above formula, we can calculate 21,000 * (100 + 10) = 2,310,000 gwei or 0.00231 ETH.

When Alice sends funds, 1.00231 ETH will be deducted from Alice's account. Bob will receive 1.0000 ETH. The validator will receive a tip of 0.00021 ETH, and a base fee of 0.0021 ETH will be burned.

The approval of the ETH spot ETF may come as a surprise, unlike the Bitcoin spot ETF, where investors began positioning themselves six months before its approval, leading to large capital inflows. However, the approval of the ETH spot ETF remains a milestone event for the cryptocurrency industry, laying a positive foundation for the future development of the industry. It is important to note that the ETH spot ETF also carries certain risks, and investors should be mindful of market risks.

This is a detailed explanation of what the ETH spot ETF is and whether the ETH spot ETF application will be approved. For more information about the ETH spot ETF application, please refer to other relevant articles by Liang Ge!#美国加征关税 $BTC