Ethereum ETF Launch Next Month Becomes ‘Certainly Possible’ with S-1 Submissions

The post Ethereum ETF Launch Next Month Becomes ‘Certainly Possible’ with S-1 Submissions appeared first on Coinpedia Fintech News

Excitement builds in the crypto space as the newly approved spot Ether (ETH) exchange-traded funds (ETFs) are possibly launching as early as mid-June. However, this development is still dependent on the promptness with which the approved clients amend their S-1 registration statements and the following feedback rounds they’ll receive from the Securities and Exchange Commission (SEC). 

Bloomberg ETF analyst James Seyffart suggests that the approvals of S-1 might be seen within a few weeks, but he also acknowledges that the process is supposed to take up to months. However, fellow analyst Eric Bachunas continues to be optimistic, expecting a mid-June launch. He states that the SEC’s feedback process required around two weeks to spot Bitcoin ETFs. 

Rapid Moves by Applicants

Following the approval of 19b-4 filings, the next step for these funds is securing the S-1 registration statement approvals, which are crucial for initiating trading. VanEck has been prompt in amending its S-1 after its 19b-4 approval, and other applicants are expected to follow suit as soon as possible. 

However, there lies a potential challenge. The SEC’s Division of Trading and Markets has approved the filings on a “delegated authority.” This means that one of the five SEC Commissioners can challenge the decision again within the upcoming ten days. Nevertheless, digital asset lawyer Joe Carlasare has pointed out that such a scenario is very unlikely to happen, as the decision would not have passed at all if it didn’t have the unanimous consent of the Commissioners.

Market Expectations and Analyst Predictions

Seyffart also predicts that if the S-1 gets approved, the spot Ether ETFs can attract 20% of the investment flows witnessed by Bitcoin ETFs. However, Balchunas looks forward to a more conservative 10-15% flow. Since the Bitcoin ETFs’ launch, they have gathered a net inflow of $13.3 billion over approximately four and a half months. Hence, if spot Ether ETF is successful in capturing 20% of it, it could witness an impressive $2.66 billion within the same period. This potential has interested investors who hope to diversify their crypto assets.

Read more: Ethereum Ready for 60% Surge as Spot ETF Approval Looms: QCP Report

The Future of Grayscale’s Ethereum Trust

Despite the prevailing optimism, some concerns remain regarding these new ETFs’ impact on existing products like the Grayscale Ethereum Trust, currently holding more than $11.3 billion. In addition, the trust could witness a major outflow since investors might prefer the new ETFs. 

Historically, Grayscale’s Bitcoin Trust experienced outflows when converted to ETF form. Major players, like VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Bitwise, and Invesco Galaxy, have received their regulatory approval on Thursday, May 23, which sheds light on a strong lineup that is currently poised to meet the market demand. However, the only applicant who did not receive approval on that day was Hashdex, highlighting the competitive and complex nature of the ETF approval process. 

Also, check out: Ethereum ETF S-1 Discussions Begin: What to Expect Ahead