Spot Ether ETFs Set for Mid-June Launch Following Regulatory Approval
Summary:
Recently approved Spot Ether (ETH) exchange-traded funds (ETFs) could launch as early as mid-June, assuming a similar approval timeline as for Bitcoin. The approval was provided under the 19b-4 format, allowing funds to be listed once they receive an approved S-1 registration statement. ETF specialists from Bloomberg anticipate a single round of amendments, with final approval potentially in a single review period. However, there are concerns about potential outflows from converted Grayscale Ethereum Trusts.
Spot Ether (ETH) exchange-traded funds (ETFs), recently granted regulatory approval, are potentially set for a mid-June launch. This is based on the assumption that the US security regulator will apply a comparable timeline to that used for its spot Bitcoin ETF process. Under the 19b-4 filings now approved, the new funds can be listed on their respective exchanges once they also receive approved S-1 registration statements.
James Seyffart, Bloomberg ETF analyst, suggests that these S-1 approvals could occur within weeks, though he concedes the process may take several months. Eric Balchunas, another ETF analyst from Bloomberg, sees a mid-June launch as feasible. Based on the SEC's previous work with spot Bitcoin ETF applicants, Balchunas anticipates a single round of comments on S-1 amendments. It's his calculated projection, based on a two-week review period, that drives his mid-June prediction.
VanEck recently filed its amended S-1 following its 19b-4 approval, and it's anticipated others will swiftly follow. Gabriel Shapiro, the general counsel for Delphi Labs, pointed out that the SEC approval came from its Division of Trading and Markets became under "delegated authority." Theoretically, one of the five SEC commissioners could question the approval in the next ten days.
Joe Carlasare, a digital asset lawyer, told Cointelegraph that such a rebuttal is highly unlikely. Seyffart disagrees with this perspective, however, citing that decisions under delegated authority represent the standard, as a formal vote on all decisions and documents would be unfeasible. He argued that a review would probably not impact the approvals.
Seyffart expects the spot Ether ETFs to generate 20% of the fund flows seen by spot Bitcoin ETFs, while Balchunas anticipates a 10-15% range. In the past four-and-a-half months, the spot Bitcoin ETFs have accrued $13.3 billion in net inflows, according to Farside investors. If Seyffart’s higher prediction is correct, the spot Ether ETFs would garner roughly $2.66 billion over an equivalent period.
However, concerns have arisen that converted Grayscale Ethereum Trusts could cause significant outflows from the spot ETF market into spot ETF form. Arkham Intelligence data indicates that, currently, more than $11.3 billion is secured in the Grayscale Ethereum Trust. On May 23rd, regulatory approval was granted to eight applicants, including VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Bitwise and Invesco Galaxy. However, Hashdex, as the only ETF issuer, had not received approval on the day.
Published At
5/24/2024 5:40:15 AM
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