Ethereum exchange-traded funds (ETFs) have recently been approved and are expected to hit the market by mid-June. The successful 19b-4 filings for spot Ether ETFs allow them to be listed on exchanges, with the next step being to obtain approved S-1 registration statements before trading can begin. Bloomberg ETF analysts predict that the S-1 approvals could be granted in a couple of weeks, with a potential mid-June launch. The process may take up to five months, but a quicker approval timeline is possible with only one round of comments on the S-1 amendments.
VanEck, one of the applicants for spot Ether ETFs, wasted no time and filed its amended S-1 shortly after receiving approval for the 19b-4 filings. Other applicants are expected to follow suit soon. However, there is a possibility that one of the five SEC Commissioners could challenge the SEC’s decision within the next 10 days. Digital asset lawyer Joe Carlasare believes that such a challenge is unlikely, given that passing it through the trading and markets division indicates no opposition from the Commissioners. Market expectations predict that spot Ether ETFs could attract around 20% of the flows that spot Bitcoin ETFs have seen, with a more conservative estimate of 10-15% from another analyst.
There are concerns regarding potential outflows from the Grayscale Ethereum Trust if investors decide to shift their holdings to spot Ether ETFs, similar to the outflows seen with the conversion of Grayscale’s Bitcoin investment product. The Grayscale Ethereum Trust currently holds over $11.3 billion in assets, raising questions about the impact of the new spot Ether ETFs on the existing trust. On May 23, regulatory approval was granted to eight applicants, including VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Bitwise, and Invesco Galaxy. One ETF issuer, Hashdex, did not receive approval on that particular day, making them the exception.
Singapore-based QCP Capital believes that the approval of spot Ethereum ETFs in the United States could potentially trigger a substantial rally of up to 60% in the price of ETH. The market is expecting significant movements, with implied volatility above 100%. QCP Capital points out that when spot Bitcoin ETFs were approved in January, Bitcoin experienced a surge from $42,000 to over $73,000 within a two-week period after the ETFs began trading. The potential impact of spot Ether ETFs on the price of Ethereum is being closely watched by investors and analysts, with expectations of significant market activity and possibly substantial inflows into the new ETF products. The ongoing developments in the approval and launch of spot Ether ETFs could have far-reaching effects on the cryptocurrency market and investment landscape.
