Analyst Certain Ethereum ETFs Approved to Unveil in June
The approval of 19b-4 applications by the SEC to facilitate Ethereum ETF creation spurs optimism among financial analysts and commentators of their imminent unveiling in June.
Bloomberg ETF analyst Eric Balchunas considers that the launch date largely depends on the speed at which applicants approved will amend the S-1 registration statements. Also, the availability of spot Ether exchange-traded funds (ETFs) depends on the rounds of feedback that the applicants will receive from the Gary Gensler-led SEC.
Analyst Predicts Ethereum ETFs Launch Certain
Analysts consider that the US Securities and Exchange Commission (SEC) will likely replicate the timeline utilized in the spot Bitcoin ETF process. The analysts are calling a mid-June launch date for the spot ETH ETF.
The pursuit of spot Ether ETFs realized a critical milestone following the SEC’s decision to green-light the 19b-4 filings on Thursday, May 23. The decision indicated that the funds could be listed on the exchanges, including Nasdaq, Cboe, and NYSE.
The applicants for the spot ETH ETFs have yet to secure approval for their S-1 registration statements. The milestone is delaying the availability of the ETF funds for trading.
Bloomberg ETF analyst James Seyffart considered that the SEC would take several weeks to approve S-1s. The analysts considered the process could take longer, typically five months.
Bloomberg ETF analyst Eric Balchunas differs from the colleague, indicating that a mid-June approval is certain. The analysts anticipate that the SEC will offer a single round of feedback to the S-1 amendments as witnessed during the spot Bitcoin ETF applicants.
Ethereum ETFs Launching in Mid-June
Balchunas revealed that the process took a fortnight, hence optimistic that such falls within the mid-June estimate. While the analysts admit they are guessing, they cited accelerated approval for 19b-4, which shortens the wait time to 90 days.
VanEck would promptly file the amended S-1 hours after the 19b-4 approval. Other applicants are yet to make it public when they file the amended S-1s, though they are projected to follow suit.
Delphi Labs lead counsel Gabriel Shapiro illustrated that the Division of Trading and Markets approved 19b-4s on a delegated authority. The general counsel illustrated that one of the SEC’s commissioners could challenge the approval decision within ten days.
Crypto asset attorney Joe Carlasare revealed that such challenges can arise theoretically. However, the lawyer ruled out it would happen.
Carlasare indicated that the Trading and Market division could only have passed the 19b-4 with ascertaining that no commissioner would oppose it.
Seyffart refutes this perspective, indicating that delegated decision-making authority has become the norm. Such is similar to undertaking an official vote in each decision and document, thereby an insane consideration.
Seyffart illustrated that the Commissioner’s request for a review would not change any approvals.
Ethereum ETFs to Realize $2.66B Net Inflows
Seyffart anticipates that the approval of S-1s will present an opportunity for the spot Ether ETFs to realize 20% of the flows that have eluded spot Bitcoin ETFs. Balchunas forecasted a smaller flow in the 10-15% range.
Farside Investors data shows that spot Bitcoin ETFs are northwards of $13 billion in net inflow barely five months after the product’s unveiling. Seyffart indicates that if Ether ETFs were to realize 20%, it would translate to a combined inflow of $2.66 billion.
Some analysts are concerned that the spot Ether ETF market could witness excessive bleeding, mainly as Grayscale Ethereum Trust converts into the spot ETF form. Such would replicate the scenario when the firm’s Bitcoin trust converted into the ETF.
Blockchain analyst Arkham Intelligence reveals that over $11.3 billion remain locked within the Grayscale Ethereum Trust. Potential outflow, as witnessed in the firm’s GBTC product, would facilitate easy catchup with other Ether ETFs.
The SEC approved 19b-4 forms from eight applicants, including BlackRock, Bitwise, Grayscale, and Fidelity. Others include VanEck, Franklin Templeton, Invesco Galaxy, and ARK 21Shares, which received regulatory approval on Thursday, May 23.
