Ethereum
Bloomberg analyst extends launch deadline
Bloomberg analyst Eric Balchunas has moved up the planned date for the launch of Ethereum Spot ETFs in the United States. This development follows comments from the US Securities and Exchange Commission on the second round of Form S-1 submissions.
S-1 Forms Receive Late Response From SEC – Details
In May, the SEC abruptly approved 19b-4 filings from eight potential Ethereum spot ETF issuers, authorizing the first step toward the potential introduction of these investment funds. In accordance with U.S. regulations, the Commission would also need to greenlight the S-1 forms of these proposed ETFs before trading can begin. For context, S-1 forms contain information about an ETF’s investment objectives, strategies, risks, fees, and more.
After the initial submission of all draft S-1 forms on May 31, the SEC quickly responded with comments described as “fairly light,” with all issuers being ordered to submit the requested amendments within a week.
Given the speed of operation, Eric Balchunas requested the Commission to quickly authorize the approval of these forms by selecting July 2nd as a potential launch date for the spot Ether ETF. However, the SEC responded late to its second round of comments, although the requests are also described as “light adjustments.”
Following this development and the rapid approach of Thanksgiving in the United States, which will allow little work to be done next week, Balchunas predicted Work on S-1 forms will resume on July 8, with approval coming shortly thereafter.
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Unfortunately, we’re going to have to push our over/under back until after the holidays. It seems like the SEC took longer to respond to people this week (although there were still very minor changes) and from what I hear, next week is dead because the holidays = July 8th, the process starts again and shortly after that they’ll launch… https://t.co/0ZQR7yiBLt
– Eric Balchunas (@EricBalchunas) June 28, 2024
It should be noted that, unlike Forms 19b-4, Forms S-1 do not have a fixed deadline, with approval depending solely on the SEC’s satisfaction with the terms proposed by the issuers. Earlier in June, SEC Chairman Gary Gensler had declared this process could “take some time”, specifying that approval will largely depend on the responsiveness of applicants to the Commission’s comments.
Ethereum Spot ETFs Expected to Quickly Reach $1 Billion in Inflows
Separately, investors and analysts have remained optimistic about the potential performance of Ethereum Spot ETFs when they eventually begin trading. In a Message On June 28, Charles Yu, vice president of research at Galaxy Research, argued that these funds would receive at least 20-50% of the demand seen in Bitcoin counterparts.
With total Bitcoin Spot ETF inflows estimated at $15 billion, Yu predicts that Ethereum ETFs will see $1 billion in monthly flows for the first 5 months of trading. Additionally, Charles Yu expects Ethereum to show higher price sensitivity to these inflows for a variety of reasons, including lower net inflation and lower supply percentage on exchanges.
Featured image from Space.com, chart from Tradingview