Crypto Investors, Prepare Yourself! Spot Ether ETFs Scheduled for Mid-June Launch in Trading.
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Spot Ethereum (ETH) exchange-traded funds (ETFs) are on the horizon, with analysts predicting a mid-June launch if the regulatory process goes smoothly. VanEck, BlackRock, Fidelity, and other major players in the industry are gearing up to introduce these ETFs, providing investors with a new avenue to enter the Ethereum market. As a result, Grayscale’s Ethereum Trust may experience outflows as investors shift their focus towards these new offerings.
Excitement is growing within the crypto community as the approval process for spot Ether ETFs nears completion, raising the possibility of a launch by mid-June. However, the timeline for this launch depends on how quickly approved clients amend their S-1 registration statements and the subsequent feedback from the Securities and Exchange Commission (SEC).
Bloomberg ETF analyst James Seyffart suggests that S-1 approvals could be granted within a few weeks, although he acknowledges that the process could take several months. Fellow analyst Eric Balchunas remains optimistic, expecting a mid-June launch based on the SEC’s feedback process for spot Bitcoin ETFs, which took approximately two weeks.
It is important to note that the approval of S-1 filings does not mean immediate trading will commence. This is simply the 19b-4 approval. There also needs to be an approval on the S-1 documents, which will take some time. Seyffart anticipates that it will take a couple of weeks, but it could potentially take longer. More information should be available within a week or so.
The key steps in the process from approval to trading involve securing S-1 registration statement approvals, which are necessary for initiating trading. VanEck has already promptly amended its S-1 following its 19b-4 approval, and it is expected that other applicants will follow suit in the near future.
One potential challenge lies in the SEC’s Division of Trading and Markets approving the filings under “delegated authority.” This means that any of the five SEC Commissioners can challenge the decision within ten days. However, digital asset lawyer Joe Carlasare believes that such a challenge is unlikely since the decision likely received unanimous consent from the Commissioners.
In terms of market impact, Seyffart predicts that if the S-1 is approved, spot Ether ETFs could attract 20% of the investment flows seen by Bitcoin ETFs. Balchunas offers a more conservative estimate of 10-15%. Over the course of approximately four and a half months, Bitcoin ETFs have garnered a net inflow of $13.3 billion. If spot Ether ETFs capture 20% of this, it could amount to an impressive $2.66 billion within the same period, attracting investors looking to diversify their crypto portfolios.
While there is optimism surrounding the launch of spot Ether ETFs, concerns have been raised about the impact on existing products like the Grayscale Ethereum Trust, which currently holds over $11.3 billion. The trust could potentially experience significant outflows as investors gravitate towards the new ETF offerings.
Historically, Grayscale’s Bitcoin Trust has experienced outflows when converted into ETF form. With major players such as VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Bitwise, and Invesco Galaxy receiving regulatory approval, it’s clear that there is a strong lineup ready to meet market demand. However, it’s worth noting that Hashdex did not receive approval, highlighting the competitive and complex nature of the ETF approval process.
Are you considering investing in spot Ether ETFs? If so, why?