Who knew that exchange-traded funds (ETFs), those traditionally passive, slow-moving investment vehicles, could drum up so much excitement?

The historic launch of several spot bitcoin ETFs earlier this year is certainly a tough act to follow, but asset managers are banking that investors will have an appetite for the second most popular cryptocurrency—ethereum—as well.

A group of eight spot ethereum ETFs, rolled out by firms including Grayscale, BlackRock, and Fidelity, started trading today. Ninety minutes into trading, the ETFs had already collectively accrued over $360 million in total assets, according to Bloomberg data posted by analyst Eric Balchunas.

Here’s the lineup of new ethereum ETFs, their ticker symbols, and their corresponding fees:

• iShares Ethereum Trust (ETHA), Fee: 0.25%
• Grayscale Ethereum Trust (ETHE), Fee: 2.5%
• Grayscale Ethereum Mini Trust (ETH), Fee: 0.15%
• Bitwise Ethereum ETF (ETHW), Fee: 0.20%
• 21Shares Core Ethereum ETF (CETH), Fee: 0.21%
• VanEck Ethereum ETF (ETHV), Fee: 0.20%
• Fidelity Ethereum Fund (FETH), Fee: 0.25%
• Invesco Galaxy Ethereum ETF (QETH), Fee: 0.25%

Ethereum rose just under 1% on Tuesday, and is up over 50% year to date.

The funds finally hit the market after years of regulatory back-and-forth with the Securities and Exchange Commission ever since VanEck filed for the first fund in 2021. After the SEC approved spot bitcoin ETFs in January, the door was finally cracked open for spot crypto products. But the agency didn’t grant full approval to ethereum ETFs until yesterday, even though the funds won partial approval in a surprising SEC decision in May.

How much demand is there for ethereum?

Even the most bullish acknowledge that ethereum doesn’t have quite the same street cred as bitcoin. While bitcoin’s value proposition as “digital gold” is relatively straightforward, ethereum’s appeal as a “technology asset” is a little less obvious to non-crypto experts.

But analysts still forecast a higher influx of assets compared to your average ETF launch. Bloomberg ETF analysts Eric Balchunas and James Seyffart project BlackRock and Fidelity will take in the lion's share of assets, and wrote in a recent note that the funds were likely to bring in about 20% of the assets that spot bitcoin ETFs did in their first year, or somewhere in the ballpark of $5 to $6 billion total.

For reference, the largest spot bitcoin ETF, the iShares Bitcoin Trust (IBIT), now has over $22 billion in assets under management after launching in January.

And others in the industry are hoping that investors will warm up to the pitch of ethereum as a technological platform.

“If Bitcoin is digital gold, then perhaps its best to describe ethereum like Apple, as it is a platform, almost like an app store, but for open finance,” explained co-founder of VC firm Framework Ventures Vance Spencer, which invests in ethereum application firms, in a written comment. “Just like how tech investors might purchase a basket of FAANG stocks, I think many investors will soon seek new types of crypto exposure beyond bitcoin ETFs, and the launch of the Ethereum ETF will kickstart that trend.”

Cutthroat fee war

One aspect of the asset management world has made its mark on these products already—fee competition. ETFs have historically fostered a highly cutthroat fee environment, as huge firms like BlackRock and Vanguard consistently cut their fees to razor-thin margins, undercutting more expensive funds.

A number of firms, including Bitwise, BlackRock, and Invesco, are offering fee waivers for the first few months of trading, meaning you can get in on the fun for free (for now).—LB

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Since we’re talking crypto ETFs today, let’s check in on bitcoin.

Bitcoin ETFs provide investors who may be a bit hesitant to dive into the wild world of crypto with a chance to dip their toes in instead, with ETFs far more regulated by the SEC than cryptocurrencies themselves. Investors have responded by throwing money at the ETFs, as the chart above reveals.

In fact, Blackrock’s spot bitcoin ETF drew a record $526.7 million in investor funds on Monday alone. And investors poured $1.35 billion into all digital investment asset products in the last week alone.

With ethereum ETFs entering the fray and more investment vehicles on the horizon, crypto is clearly coming into its own.

🟢 What’s up

• MSCI bounced 7.90% higher today thanks to a strong earnings announcement in which the financial company beat analyst expectations on both revenue and earnings.
• Lockheed Martin leapt 5.63% on a beat-and-raise earnings report that saw the defense company reap the rewards of geopolitical conflict.
• GE Aerospace flew 5.68% higher after beating analyst expectations thanks to strong demand for its engines.
• Sherwin-Williams gained 6.87% after the paint company beat earnings expectations, raised its full-year guidance, and declared “Upward” to be the paint color of the year.

What’s down

• UPS delivered a 12.05% dip, falling to new all-time lows after missing analyst earnings expectations, as well as cutting its revenue forecast.
• NXP Semiconductors plunged 7.58% on management's poor revenue forecast for the coming quarter, despite meeting expectations this quarter.
• Comcast sank 2.58% on a mixed earnings announcement that saw the company beat on earnings but miss revenue thanks to a slow theme parks segment.
• GM stalled 6.43% despite announcing solid earnings—investors didn’t like to hear management note that the second half of the year will be a lot tougher.

Spotify handily beat earnings expectations, announcing its most profitable quarter ever on Tuesday as its turnaround plan pays off.

The Swedish streaming giant reported earnings per share of $1.44, over 30% higher than what Wall Street analysts anticipated and far higher than the $1.68 adjusted EPS loss it posted in the second quarter of 2023. Its revenue of $4.1 billion increased 20% year over year and was about in line with expectations.

Spotify revealed that the number of paid subscribers jumped 12% from last year to 246 million, and its monthly active users rose 14% year over year to 626 million, coming in slightly below expectations.

Shares of Spotify popped nearly 12% on Tuesday, and have gained more than 75% in 2024.

CEO Daniel Ek said in a statement that the company’s business is growing “on a timeline that has exceeded even our own expectations.”

Should investors tune in?

Today’s big win for the music and podcast streaming giant comes after the company shifted course earlier this year, trimming its headcount and reorganizing its podcast distribution strategy, which had previously been losing money. Spotify also announced it was raising prices in June, after it had already raised prices last summer.

The turnaround plan seems to have worked, considering the company reported record quarterly income. Spotify’s forward-looking guidance was rosy, too—the company said it was going to continue to invest in its newer audiobooks offerings, a facet of the business it expects to contribute to ongoing profit growth. And management believes its monthly active user count will rise to 639 million by the end of the third quarter.

In a MarketWatch analysis, 23 analysts have a “buy” rating on Spotify, while five have an “overweight” rating, nine have a “hold” rating, and two have “underweight” and “sell” ratings.

Do you hear that? It sounds like Apple Music’s tears.—LB

• The market rotation may be giving small caps their time in the sun for now, but these 10 blue chip stocks are still safe bets for the long term.
• Existing home sales slumped last month, while the average home price in the US rose to a new record of $426,900.
• Most airlines have recovered from the Crowdstrike outage that began last week, but Delta Air Lines has continued to ground flights, and the Department of Transportation is probing for a reason why.
• The industrials sector should experience stronger earnings growth than any other sector through 2026.
• Meta has released a new open-source AI model dubbed Llama 3.1 that it says can go toe-to-toe with OpenAI and Alphabet.
• Speaking of Alphabet, the company announced it has reversed its decision to remove cookies from Chrome browsers. Oh, and it’s also not going to buy cybersecurity firm Wiz for $23 billion anymore either.

The earnings avalanche continues tomorrow, while economic data downshifts. The big reports to watch are the S&P Global Flash PMI for both the manufacturing and the services sectors.

The services sector has been a prime beneficiary of the post-pandemic spending boom as people focus more of their spending on experiences and less on goods. The result has been 17 straight months of service sector growth. Economists are hoping for more of the same, and expect this month’s reading to stay steady at 55.

Manufacturing, however, has suffered as high interest rates mean production costs are high as well. The sector has contracted for 19 of the last 20 months, and last month’s reading of 48.5 marked the third-straight month of lower manufacturing activity. Economists are praying for a turnaround, but with the Fed showing no signs of budging on interest rates just yet, that seems unlikely.

Before the open

• AT&T (T) has had a few hiccups recently. First, yet another major hack exposed customer information. And yesterday, results from Verizon revealed that people aren’t buying phones like they used to. Yet Wall Street has high hopes for Ma Bell: The average price target on the Street is 17% higher than where shares trade today. Consensus: EPS $0.57, $29.98 billion in revenue.

After the close

• IBM (IBM) hasn’t enjoyed the big AI pop that many of its tech peers have recently, though that’s mainly because its bread and butter these days is cloud software solutions. But this earnings call, investors will be hoping to hear that the company is making strides on the next new thing: quantum computing. Consensus: EPS $2.19, $15.62 billion in revenue.
• Chipotle (CMG) is the king of bowlslop, and it’s good to be the king. Shares are up nearly 28% in the last 12 months, and Wall Street’s average price target is yet another 28% higher than where shares stand today. Yet that may be a problem for the stock: Investors will want to know whether or not this stock is overvalued, and tomorrow’s earnings will go a long way toward revealing what the company is really worth. Consensus: EPS $0.31, $2.93 billion in revenue.
• Ford (F), like its competitors, has struggled to nail the EV market over the past few months. High costs combined with low sales have dragged the company’s profits down, but management has promised to make strides to improve margins. If they can fulfill those promises, a healthier bottom line combined with the company’s strong dividend could send this stock into overdrive. Consensus: EPS $0.66, $44.05 in revenue.