Ethereum
Ethereum ETF trading moves closer as US SEC mandates submission of S-1 forms today
Gary Gensler, head of the United States Securities and Exchange Commission
The United States Securities and Exchange Commission (SEC), led by Gary Gensler, has asked potential issuers of Ethereum Exchange Traded Funds to submit their amended S-1 forms by today.
This means an earlier than expected market debut for the newly approved Ethereum spot ETFs and an upcoming influx of institutional capital into the crypto space.
Nairametrics earlier reported the first step in the approval process which involved the approval of Forms 19b-4, which marked a historic shift in the US SEC’s position on the issue of approving Ethereum ETFs in the country.
Sources close to the situation have reported that the US regulatory agency today requested a draft S-1 fill from potential Ethereum ETF issuers.
The agency will now conduct an inspection and give its first round of comments in the remaining episode of the Ethereum ETF spot approval process.
News continues after this announcement
News continues after this announcement
The process of launching an Ethereum ETF or any ETF involves approval of two documents by the SEC, Forms 19b-4 and Forms S-1.
Potential Ethereum ETF issuers’ Forms 19b-4s were already approved on May 23, in a historic moment as the rest of the crypto world awaits Forms S-1 approval, which could take months.
Eric Balchunas, senior ETF analyst at Bloomberg, noted that it could take some time for the S-1 registration statements to be finalized, which could delay the market entry of the newly approved Ethereum ETF.
Matthew Siegel, head of digital asset research at one of the potential Ethereum ETF issuers tweeted the opinion of JP Morgan analysts on the expected start time of trading of Ethereum ETFs.
JP Morgan analysts believe this could happen before November, due to the political overtones underlying the whole issue leading up to the country’s November 5 presidential elections.
JPM: “Issuer registration statements remain under review by the SEC. Therefore, there is no expected date for the start of trading of these ETFs. We note that Galaxy analysts anticipate that the S-1s will be finalized and negotiations could begin in July or August 2024. We note that this important step yesterday toward final approval comes after a sudden reversal in regulatory sentiment earlier this week, when the SEC apparently re-engaged its stakeholders. after months of stalled conversations. We view this endorsement of ETF, and crypto more generally, as an increasingly political issue as the 2024 US presidential election approaches. As such, we expect trading of the ETH spot ETF starts well before November. Matthew tweeted
The approval of Ethereum spot ETFs follows the earlier approval of Bitcoin spot ETFs in January. The US SEC has generally approved 11 spot Bitcoin ETFs at once, with Blackrock’s IBIT now leading the pack with over $20 billion in assets.
What there is to know
- Form S-1 is required by the SEC from domestic issuers as a registration statement before they can offer new securities to the public. This form is often used for initial public offerings (IPOs) and follow-on offerings, but can also be used for other primary and secondary sales of securities.
- Form 19b-4 is used to propose a rule change and is on file with the SEC. This is necessary when an exchange wants to list a new product, such as a spot Bitcoin ETF. The form contains detailed information about the proposed rule change and its potential impact.
- Analysts expect Ethereum ETF trading to trigger an Ethereum bull run sending its price higher and benefiting the entire crypto market.