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Ethereum ETFs Set to Launch in June

24 May, 2024 Coin news

Ethereum ETFs Set to Launch in June

The recent approval of spot Ether (ETH) exchange-traded funds (ETFs) could see them launching as soon as mid-June, following a timeline similar to the one used for spot Bitcoin ETFs by U.S. securities regulators.

Today, spot Ether ETFs were granted approval for their 19b-4 filings, a crucial step that allows these funds to be listed on various exchanges.

However, trading cannot commence without the approval of S-1 registration statements.

Bloomberg ETF analyst James Seyffart has mentioned that S-1 approvals might be issued within a "couple of weeks," although he acknowledges the process can extend up to five months.

In contrast, his colleague Eric Balchunas suggested that a mid-June launch is "certainly poss[ible]." He anticipates that the S-1 amendments will only go through one round of comments, drawing a parallel to the SEC’s approach with spot Bitcoin ETF applicants. Balchunas bases his mid-June prediction on the feedback process taking about two weeks, but he cautions, "Just a guess tho. We will see."

Following the approval of their 19b-4 filings, VanEck quickly submitted its amended S-1, with other applicants expected to do the same very soon.

However, Gabriel Shapiro, general counsel at Delphi Labs, pointed out that the SEC’s approval was conducted by its Division of Trading and Markets under "delegated authority," noting that any of the five SEC Commissioners could potentially contest the decision within the next 10 days.

Digital asset lawyer Joe Carlasare commented to Cointelegraph that while such a challenge is theoretically possible, it is unlikely — “but it won’t.”

He explained, "They wouldn’t have passed it through trading and markets without knowing that no Commissioner opposed it.”

Seyffart countered this view, stating that operating under delegated authority "is the norm" because requiring a formal vote on every decision "would be insane."

He also suggested that a review request "wouldn't change anything" regarding the approvals.

If the S-1s are approved, Seyffart anticipates that spot Ether ETFs could attract about 20% of the flows seen by spot Bitcoin ETFs.

Balchunas, however, estimates the potential inflow to be in the 10-15% range.

According to Farside Investors, spot Bitcoin ETFs have amassed $13.3 billion in net inflows since their introduction about four and a half months ago.

If spot Ether ETFs capture 20% of that, they could accumulate approximately $2.66 billion over the same period.

Concerns are also emerging that the new spot Ether ETF market might experience significant outflows, especially from the Grayscale Ethereum Trust converting into an ETF, a scenario reminiscent of the outflows from the firm’s Bitcoin investment product conversion.

Over $11.3 billion is currently held in the Grayscale Ethereum Trust, per data from Arkham Intelligence.

On May 23, regulatory approval was granted to eight applicants including VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Bitwise, and Invesco Galaxy, while Hashdex was the sole ETF issuer not to receive approval on that day.

Sources:

https://cointelegraph.com/news/ether-etf-launch-next-month-certainly-possible-analysts-say

https://platform.arkhamintelligence.com/explorer/entity/grayscale

https://x.com/EricBalchunas/status/1793758232634126816

https://x.com/JSeyff/status/1793752733763445043

https://x.com/lex_node/status/1793761121335218188

https://x.com/JSeyff/status/1793788787941601355

https://farside.co.uk/?p=997

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