Why the new spot ether ETFs may ‘be a hit’ despite recent weakness

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It's a historic week for the cryptocurrency markets with spot ether exchange-traded funds making their debut.

Franklin Templeton is one of the nine spot ether ETF applicants which got approval Tuesday from the Securities and Exchange commission.

The firm is behind the Franklin Ethereum ETF (EZET) — now down about 10% since its inception as of Thursday's close. The losses sparked by the sell-off in cryptocurrencies.

«We think they'll be a hit. Whether they're going to get the same amount of assets is… probably unlikely,» said David Mann, the firm's head of ETF product and capital markets, told CNBC's "ETF Edge" on Tuesday. «But it's still pretty awesome.» 

VanEck, a global investment manager, is behind the VanEck Ethereum ETF (ETHV) which also got approval.

CEO Jan Van Eck expects spot ether ETFs will help investors diversify, but he sees a different energy level for spot ether ETFs.

«I don't think they're going to be the same, same kind of hit [as spot bitcoin ETFs]» Van Eck said.

His new fund is also down sharply since Tuesday.

Long-term, Morningstar's Ben Johnson considers the volumes for spot ether ETFs as normal because they're roughly proportional to the relative market cap of ether versus bitcoin. 

«There's healthy appetite. There's healthy volume. There's healthy demand there,» the research firm's head of client solutions said.  "[The ETFs are] opening up access to new markets, new portions of the investment opportunity set for investors and putting that in a package that is cost effective. It's convenient, and it's compatible with the way that more investors are building their portfolios these days."

Ether dropped sharply on Thursday. As of the market close, it's down about 11% for the week.