*

Ether ETFs from major firms trading on Cboe, Nasdaq, and

NYSE

*

Ether ETFs follow successful launch of bitcoin products in

January

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Galaxy Research projects ether ETFs could attract $1

billion

monthly inflows

(Updates to reflect that ETFs have started trading, adds quote

in paragraph 3)

By Hannah Lang and Suzanne McGee

July 23 (Reuters) - The first U.S. exchange-traded funds

(ETFs) tied to the price of ether, the world's second-largest

cryptocurrency after bitcoin, began trading on Tuesday, in

another watershed event for the crypto industry's push to go

mainstream.

Ether ETFs from VanEck, Franklin Templeton,

Fidelity, 21Shares and Invesco ( IVZ ) began trading on Cboe,

while one from BlackRock ( BLK ) began trading on the Nasdaq.

Products from Bitwise and Grayscale Investments also started

trading on the New York Stock Exchange.

"This is a real inflection point for the industry," said

Andrew Jacobson, head of legal at 21Shares.

Following the launch of nine U.S. spot bitcoin ETFs in

January, the ether products mark another win for the

cryptocurrency industry's campaign to push digital assets into

the broader financial sector, although the products are unlikely

to garner the same volume of inflows, analysts said.

The bitcoin ETF launches were the culmination of a

decade-long tussle with the Securities and Exchange Commission,

which had rejected the products due to market manipulation

concerns.

The agency was forced to green-light the ETFs after losing a

court challenge brought by digital asset manager Grayscale

Investments, although it warned when approving them that the

products were still highly risky.

The launch was one of the most successful in the ETF

market's history with the products attracting $33.1 billion in

net inflows as of the end of June, according to Morningstar

Direct data.

Bitcoin ETF issuers competed hard on fees, with many firms

offering to waive fees entirely for a certain period of time.

The ether ETF fees range from 0.19% for Franklin Templeton's

ether ETF to a high of 2.5% for Grayscale's ethereum trust,

which it is converting into an ETF, according to their public

offering documents. The rest cluster around 0.25%.

Overall, the fees are comparable to the bitcoin products,

although issuers are offering fewer waivers.

Grayscale also is rolling out a "mini" version of its ether

ETF with a fee of only 0.15%.

While estimates on demand for the ether products vary

widely, Galaxy Research - whose sister company Galaxy Asset

Management has a pending ether ETF with Invesco ( IVZ ) - has projected

that the ether ETFs could attract monthly inflows of $1 billion.

"Overall, market participants expect strong interest in ETH

Spot ETFs and significant inflows in the first 3-6 months

post-launch," Matteo Greco, research analyst at Fineqia

International, wrote in a note. He added that demand for the

ether ETFs will be crucial in ascertaining investor appetite for

digital assets beyond bitcoin.

Issuers began filing for the ether ETFs in September.

Executives initially had low hopes that the SEC would approve

the products after discouraging meetings with officials.

But the agency surprised the industry in May when it

approved rule changes required for exchanges to list the

products, the first of two key regulatory hurdles.

SEC Chair Gary Gensler last month told Reuters the Grayscale

ruling had influenced his thinking on approving the ether

products, because the underlying market circumstances were

similar.