Three experts on when you can buy an Ethereum ETF

Don’t expect spot Ethereum exchange-traded funds to launch immediately after the Securities and Exchange Commission greenlights them.

Up until Monday, the SEC seemed poised to deny all applications for Ethereum ETFs, and the agency’s sudden change of heart has surprised both its staff and prospective issuers.

Now, with a crucial deadline looming, it’s likely that the SEC will approve in all-but-official terms the investment products on Thursday— but it will probably still need more time to sort through paperwork before the ETFs can launch.

“There will be days (at a minimum), likely at least weeks, and potentially months between approval and launches here,” Bloomberg Intelligence ETF analyst James Seyffart posted.

“It will be weeks, not months, but all of us are just making educated guesses,” Eric Balchunas, another Bloomberg Intelligence ETF analyst, told DL News. “The intel will come soon though, we’ll know for sure.”

SEC filings

At issue are two sets of filings that prospective ETF issuers must get sorted: 19b-4 filings and S-1 filings.

19b-4 filings are signed off by the SEC’s Trading and Markets division, while S-1 forms are handled by the regulator’s division of Corporate Finance.

It’s only after they’re both finalised that the SEC can officially greenlight the products.

All prospective ETF issuers need their 19b-4s in order by Thursday if they want their product ready for launch day. That’s because a crucial deadline for VanEck’s 19b-4 filing is coming up: If the SEC doesn’t approve that filing by then, it will be as if the agency rejected the application.

But it’s not just VanEck’s problem. Just like with the spot Bitcoin ETFs, the SEC likely wants to approve all potential Ethereum ETFs at the same time to avoid giving an advantage to any one specific product. So every issuer needs to rush to get that document ready by VanEck’s deadline.

However, once the 19b-4s are approved, the SEC and prospective issuers have a lot more time to finalise S-1 filings.

“The SEC spent nearly four months reviewing and iterating Bitcoin spot S-1s and five months reviewing Bitcoin futures S-1s,” Scott Johnsson, an associate at international law firm Davis Polk & Wardwell, wrote.

“If the division of Corporation Finance indeed was told about this potential approval yesterday, then they’re likely just getting started,” he added.

In other words, the SEC will likely signal on Thursday that it will be approving the Ethereum ETFs by finalising the 19b-4 filings — but it will only officially greenlight them later on, possibly this summer, once the S-1 filings are dealt with as well.

“A month would be a pretty quick turnaround,” Johnsson said. “That’s basically a single turn of SEC comments.”

Tom Carreras is a markets correspondent at DL News. Got a tip about Ethereum ETFs? Reach out at tcarreras@dlnews.com