The cryptocurrency industry’s anticipation for spot Ethereum exchange-traded funds (ETFs) to launch this week is waning as the Securities and Exchange Commission (SEC) appears to be taking a more cautious approach.
Eric Balchunas, a Bloomberg Intelligence analyst known for his ETF insights, has revised his expectations. Initially predicting SEC approval before July 4th, he now targets the week of July 8th as more likely.
Unfort think we gonna have to push back our over/under till after holiday. Sounds like SEC took extra time to get back to ppl this wk (altho again very light tweaks) and from what I hear next wk is dead bc holiday = July 8th the process resumes and soon after that they’ll launch… https://t.co/0ZQR7yiBLt
— Eric Balchunas (@EricBalchunas) June 28, 2024
This shift comes after reports that the SEC has asked prospective issuers to amend their applications.
The delay, while minor, has tempered the industry’s excitement. Many hoped that the introduction of spot Ethereum ETFs would invigorate the market, similar to the impact of spot Bitcoin ETFs earlier this year.
According to Bitwise’s Matt Hougan, the launch of spot Ether ETFs could trigger massive capital inflows into the market, potentially attracting $15 billion by the end of FY2025.
Hougan’s projection is based on a detailed analysis of several factors, including comparing Ethereum’s market cap to Bitcoin’s, examining the global crypto ETP market, considering Grayscale’s Ethereum Trust (ETHE) conversion, and factoring in the impact of spot Bitcoin ETFs’ “carry trade.”
Meanwhile, an insider from one of the ETF applicants revealed to The Block that the SEC has returned the S-1 forms submitted by prospective Ethereum ETF issuers, providing light comments and asking them to address the issues and resubmit. This means that these issuers will need to go through at least one more round of review before their ETFs can be approved and go live.
Despite this setback, Ethereum’s price has shown resilience, rising more than 2% over the last 24 hours to trade at $3,461. This suggests that while the ETF approval process may be delayed, market interest in Ethereum remains strong.
The situation underscores the complex regulatory landscape surrounding cryptocurrency ETFs and highlights the SEC’s thorough approach to these new financial products. As the crypto industry awaits further developments, all eyes will be on the SEC’s next moves in the coming days.
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